Global electronics production, valued at more than €1.410 trillion (about US$1.96 trillion) in 2012, will show a compound annual growth rate of 3.2 percent over the period to 2017 when the market will reach €1.655 trillion (about US$2.30 trillion), according to the market analysis firm.
However, while North America, Europe and Japan have lost a large share of equipment manufacturing to China over the last ten years, it is now China’s turn to feel the pressure from emerging economies. And with rising demand for high value professional electronics in industrial, automotive and aerospace applications there is an opportunity for North America, Europe and Japan over the next five years.
Global electronic equipment production by region in 2012 (center) and 2017 (outer). Source: Decision Etudes Conseil.
At the end period under study China will still be the largest manufacturer of electronic equipment at 36 percent of global supply, but will have lost market share, down from 2012.
North America, Europe and Japan have already lost most of the world’s computer, communications and consumer electronics production but the situation is now relatively stable, the report suggests Other sectors such as strategic aerospace and military production, industrial, automotive and medical equipment production is less likely to migrate and it will be China, having emerged as the leading producer, that will come under pressure from other territories such as India, Vietnam and Malaysia.
Electronic equipment production growth rates per year in Europe, North America and Japan. Source: Decision Etudes Conseil.
Indeed at the end of the period under study the annual growth of production of electronic equipment will be higher in all of North America, Europe and Japan, than in China, which will be languishing down at 1.8 percent, Decision predicts.
Electronic equipment production growth rates per year in China, Other Asia Pacific and ROW. Source: Decision Etudes Conseil.
To see how fortunes can change within a decade consider that in 2002 North America, Europe and Japan still controlled about 66 percent of global electronic equipment production. In 2012, the three regions were down at 41 percent. But this will only creep down to 39 percent by 2017. China is set to lose 2 percentage points of market share while the Asia-Pacific region excluding China grows to hold one fifth of global production.
The strong growth will come from the movement of plants from China to adjacent countries to take benefit from lower labor rates starting with low-end mass-market products such as entry-level mobile phones.
Europe and North American can not only retain manufacturing at the higher value, lower volume professional end of the manufacturing spectrum but can also benefit from rising export demand for these industrial, automotive and medical products as spending power increases in the emerging economies of the world, Decision reckons. Decision forecasts CAGRs for Europe and North America of 1.7 and 1.9 percent, respectively.
Global electronic equipment production by application sector in 2012 (center) and 2017 (outer). Source: Decision Etudes Conseil.
The consumer, communication and computing markets represented 66 percent of the production of electronic equipment by value in 2012 and the enormous volumes, measured in billions of units per year will increase, but price erosion will see the value reduce to 61 percent in 2017, according to Decision. The process is exemplified by how personal computer production value had already been overtaken by the combined production of smartphones and tablet computers in 2012.
Professional electronic production, comprising electronic equipment embedded into aircraft, defence and security systems, automotive, trains, ships, medical equipment and so in is expected to increase significantly in value, from €486 billion (about $670 billion) in 2012 to €656 billion (about $900 billion) in 2017. This represents growth to 40 percent of worldwide electronic production compared to 34 percent in 2012
The automotive sector will also benefit from the increased use of electronics for energy efficiency and electrification and increased penetration of the automobile into emerging markets.
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