The Passive components market review USD 48.13 billion by 2023

2023-11-17

USD 48.13 billion by 2023

The Passive components market review

The global passive electronic components market size was valued at USD 32.95 billion in 2021, which is envisioned to reach USD 48.13 billion at a CAGR of 4.85% during the forecast period.
 

The movement of electrical current through electronic circuits drives and controls the

electronic devices in almost every environment today. A passive element is an electronic component that does not produce power but dissipates, stores, and releases the power it previously generated. Electronic components that use up energy are known as passive electronic components. lt does not produce energy, cannot gain power, and does not require any form of electrical power to function.They do this by merely taking in energy.

The passive electronics market has experienced significant growth over the past few years, mainly due to the increasing digitalization of various industries,which has led to a rise in the adoption of consumer electronics across these industries, as well as an increase in the demand for connectivity and mobility. As a result of these advancements, the complexity of electronic products is also growing. This drives demand for passive components in the electronics and automotive industries.

The development of Hongda Capacitors confirms the development trend of the industry.

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The steady growth of inductors is currently attributable to the increasing number of product launches, advancements in the consumer electronics industry, the rising utilization of inductors in automotive electronics, and the growing adoption of smart grids. Hongda Capacitors supplier the inductors to smart home and 5G products manufactures.

Market Drivers

The Growing Complexity of Electronic Devices to Foster Market Growth

With technological advancements, electronics and electronic devices are becoming more complex, primarily due to consumers' rising demand for minor or slim devices. Customers have certain expectations for these devices today, such as a sleek, thin design with a screen that extends from edge to edge.Owing to their low price, small size, and lightweight, MEMS gyroscopes have achieved tremendous success in smartphones. Moreover, features such as voice-enabled smart devices have recently gained popularity.

Based on a survey conducted by Accenture, more than 50% of internet users worldwide employ digital voice assistants. This is anticipated to further increase the complexity of electronic systems, thereby increasing the demand for passive electronic components market. In addition, other technologies like 5G require multiple antennas, larger processors, and a battery. Hence, it is projected that future devices will include more radios, larger processors, more components, and a higher battery demand while maintaining the same form factor.

Manufacturers of 5G chips increasingly require smaller package designs with the same capacitance or resistance as older,larger versions. Manufacturers of passive components respond to this demand by providing expanded ranges in smaller format designs.

Passive components must also function in harsher environments, with extreme temperatures, vibration ratings, dust, liquid resistance requirements, etc. This technology has primary applications in the automotive, aerospace, and oil and gas industries.Additionally, passive electrical components contribute significantly to the healthcare and medical device industries Various advancements in the healthcare industry, such as the development of larger hospital equipment, medical wearables, and point-of-care devices, are anticipated to increase demand.The medical industry continuously drives electronics demand. As technology advances and smaller, denser, and more reliable circuit boards become feasible, passive electronic components will play a more significant role in the healthcare industry.

Market Restraints

Increasing Metal Prices lmpacting the Cost of Producing Components to Hinder Market Growth

The increased cost of metals substantially impacts the mass-produced electronic components used in the consumer electronics and automotive industries.The variable costs for manufacturing passive electronic components are between 40% and 50% , while the fixed costs are between 15% and 209%. Metal costs, as a proportion of the total cost of goods sold, may account for approximately 25% of large producers' expenses. Consequently, increases in the prices of palladium, nickel, and ruthenium affect the total cost of production for specific high-volume components. In addition, external factors such as mine closures, labor disputes, refinery closures,and speculation are anticipated to contribute to the price increases of critical metals used in the mass manufacturing of passive electronic components market.

Market Opportunities

Increasing Preference for Miniaturized Design to Spur Market Opportunities

One of the latest trends in the electronic industry is the demand and need for smaller, lighter, and more powerful electronics, i.e. The miniaturization of electronics and components.Rapid technological advancements have resulted in product availability with multiple functions on a single platform. ln addition, the development of end-user industries has necessitated the development of compact and sturdy semiconductor devices. In contrast to traditional PCB boards, modern smartphones, for example, require a smaller PCB board.There is also the emergence of loT devices with regular and unique shapes, such as wearables, which can only be accomplished through miniaturization. This is expected to significantly generate growth opportunities for miniaturized passive components.

Regional Analysis

The region-wise segmentation of the global passive electronic components market includes North America, Europe ,Asia Pacific, and LAMEA.

The Asia Pacific Will Dominate the Regional Market

Asia Pacific will command the regional market with the largest share and grow at a CAGR of 5% during the forecast period. Several multinational corporations are establishing manufacturing facilities in Asian Pacific countris, either independently or through joint ventures with regional businesses, due to the expansion of the electronics industry.

It is projected that this will rise the local production of passive electronic components in the Asia-Pacific region.Due to the intense competition between manufacturers,businesses are also working to reduce the size of their products to make them more portable and versatile.

The strong demand for notebooks and gaming machines, which supports the stay-at-home economy, as well as the gradual increase in demand for the handset and automotive applications, has prompted several businesses to boost their output.Such factors are most likely to propel the passive electronic components market in the region.Companies, such as Murata, have deployed specialized inductors for NFC circuits, contributing to the region's significant communication advancements. Currently, NFC is used for transactions.Nevertheless, there is still considerable room for growth.

Numerous nations in the region have transitioned to more advanced connectivity speeds , like 4G, which necessitate a more significant number of passive electronic components than earlier technologies. China and Japan significantly contribute to the region's growing electric vehicle sales.

The sales of battery-electric vehicles in the Asia-Pacific region increased from 25.27 thousand units in 2012 to over 100 thousand units in 2020. Thus, contributing to the region's passive electronic components market.

Hongda Capacitors is working closely with the distributors around the world, to provide our passive components to the right customer at right price.