Connector Industry Forecast to 2024
Pandemic-era supply chain disruptions and demand imbalances a year ago continue to weigh on the connector industry. These factors have improved as we enter 2024, but new technology trends and other uncertainties are changing the landscape. Here’s what to expect in the coming months.
Entering the new year, the connector industry is facing a series of challenges and opportunities. Global conflicts are putting pressure on supply chains when it comes to accessing materials and opening shipping lanes.
Labor shortages continue to impact manufacturing, especially in North America and Europe. However, demand is strong in many markets. The implementation of 5G and sustainable energy infrastructure is creating new opportunities.
Investing in chip manufacturing will soon bring new facilities into operation. The continuous development of new technologies is driving innovation in the interconnection field, and in turn, these new connector products are also achieving greater achievements in electronic design.
Impact in 2024 five major trends in connectors
SWaP
It is the top priority for connector design and specification in every industry. Product design has achieved astonishing size reductions and performance leaps in high-speed interconnects, thanks to the contributions of component designers. The widespread use of portable, connected devices is transforming every product category and, over time, the way we live our lives.
In addition to small devices, large products such as cars, spacecraft and aircraft also benefit from this miniaturization trend. Smaller, lighter components not only help reduce payload but also open up the possibility of travelling farther and faster.
Customization
While the long development time and high cost of custom components prompted the emergence of a thousand standardized, superior multi-function COTS components, new processes such as digital modeling, 3D printing and rapid prototyping allow designers to quickly and Get perfect, uniquely designed parts without too much of an expensive burden.
Advanced packaging enables designers to push the limits of Moore’s Law, replacing traditional integrated circuit designs with new strategies that integrate chips, and electrical and mechanical components into a single packaged device. Multi-chip modules, system-in-package (SIP), 3D IC, and other creative packaging designs are enabling huge performance improvements.
New material
Materials science is addressing market-specific needs and industry-wide challenges, including weight reduction, reinforcement and durability; biocompatibility and sterilization requirements, and the need for products that are safer for the environment and human health.
Artificial intelligence AI
AI technology is making a splash in 2023 with the arrival of generative AI models. In 2024, the technology will be applied to component design to optimize performance, increase efficiency, test systems and designs, and explore new formats.
At the same time, the extreme demand for high-speed performance required to facilitate these functions will put greater pressure on the connector industry to create new and more powerful products.
Forecasts for 2024 mixed
Forecasting is always difficult, especially in times of financial and geopolitical uncertainty. Predicting future business conditions in this environment is nearly impossible. The economic market remains unstable after the epidemic.The GDP growth rate of all economies around the world is slowing down, and the problem of labor shortage still exists.
Although shipping and trucking Increased freight capacity has led to significant improvements in global supply chain issues, but we still face some obstacles posed by labor shortages and global conflicts. Even so, the global economy appears to be performing better in 2023 than most economists expected, setting the stage for strong economic development in 2024.
Bishop & Associates expects positive connector growth in 2024. Growth in low to mid-single digits is the historical norm for the connector industry, with demand experiencing a historic rebound after a year of decline.
Report investigation
Asian companies are reporting a very pessimistic outlook. Global connector sales will remain essentially flat in 2023, although a surge in activity toward the end of the year could signal an improvement in 2024. Bookings for November 2023 are up 8.5%, November’s book-to-bill ratio is 1.00, YTD is 0.98, and the industry backlog is 13.4 weeks.
The market-leading this growth was transportation, with year-on-year growth of 17.2%; automotive followed with 14.6%, and industrial with 8.5%. Orders increased year-on-year in four of the six regions, with China experiencing the fastest growth. Even so, all regions continue to post negative results year-to-date.
Bishop’s Connector Industry Forecast 2023-2028 report provides an in-depth look at the connector industry’s performance going back throughout the pandemic recovery period, including a full report in 2022, a preliminary assessment in 2023, and a 2024 through 2028 detailed forecast. You can learn a lot about the electronics industry by looking at connector sales by market, region, and product type.
Observation Display
Europe ranks fourth among the six regions for percentage growth in 2022, but ranks first in 2023, with projected growth of 2.5%.
Sales of electronic connectors vary by market segment. The telecom/datacom market will register the largest percentage growth at 9.4% in 2022, driven by increased internet activity and the continued push for 5G. In 2023, the telecom/datacom market will again show the largest growth, growing by 0.8%, although nowhere near the growth seen in 2022.
In 2023, the telecom data communications market will be followed by the military aerospace market with a growth of 0.6%. The military/aerospace market hasn’t moved beyond key markets like automotive and industrial since 2019, but unfortunately, global turmoil has put military/aerospace spending in the spotlight.
In 2013, North America and Europe accounted for 42.7% of total sales, while the Asian market (Japan, China and Asia Pacific) accounted for 51.7% of global connector sales.
In fiscal 2023, North America and Europe are expected to account for 45% of global connector sales, an increase of 2.3 percentage points from 2013, while the Asian market is expected to account for 50.1%, a decrease of 1.6 percentage points.
Connector Outlook to 2024
The new year is full of endless possibilities, and what the future holds is still to be revealed. What we can be sure of, however, is that electronics will continue to play a pivotal role in driving the world forward. As an emerging force, the importance of interconnection technology is self-evident.
As technology continues to advance, interconnection will provide key support for various innovative applications and become an indispensable cornerstone of the digital age. Whether it is the popularization of smart devices, the expansion of the Internet of Things, or the advancement of artificial intelligence, interconnection technology will play a vital role.
We have reason to believe that in the new year, electronic products and interconnection technologies will continue to go hand in hand and jointly write a wonderful chapter in the future.