Electronics barometer #ACSIEL – 3rd quarter 2023

Paris, November 8, 2023 – The Acsiel electronics barometer has been aggregating quarterly sales in the electronics sector since 2017 in France.

Two indexes make up this barometer:

• one indicates sales linked to electronic components (semiconductors, passives, printed circuits, connectors) and consumables (solder pastes, flux, accessories) intended for industry
• the other refers to sales related to electronic test and measurement equipment, electronic card production equipment.

The College Equipment & Services and Test & #Acsiel Measurements has just finalized the barometer for the 3rd quarter of 2023.

> Electronic components and consumables

Analysis

• A decline has been perceptible for two quarters in sales of electronic components (semiconductors, passives, printed circuits and connectors) and consumables in France, and order intake is increasing. drop. Year-on-year, the level of our index remains positive in the third quarter (+4%) but this growth has slowed down very significantly.
• However, the index remains well above its pre-covid level, mainly thanks to semiconductors.
• The current slowdown shows that the magnitude of the recovery was not only generated by an increase in demand but also by a rebuilding of stocks across the entire ” supply chain.”
• At the same time, the very significant investments made by manufacturers have enabled an increase in production and a significant reduction in delivery times.
• Inventory corrections, inflation, rising interest rates and growing geopolitical tensions are negative factors for our entire industry and tend to worsen the confidence of stakeholders in the short term.
• In the automobile industry, a notoriously predominant sector in France, manufacturers’ order portfolio was very high due to strong growth in demand combined with delivery delays due to the shortage. But the “pervasion” of electronics coupled with the rapid growth of electric vehicles cannot indefinitely compensate for the decline in other markets in a degraded environment and with heightened competition.
• The industrial segment, which has until now benefited from its fragmentation and a certain inertia, is starting to run out of steam. Inflation and rising interest rates have significantly reduced demand in certain markets, including home automation.
• On the other hand, for the aeronautics, aerospace and defense markets, the signals remain green.

> Test and measurement equipment, production machines

Analysis

• In the third quarter of 2023, the capital equipment index recorded a sharp decline both sequentially (-15%) and year-on-year (-23%).</ li>
• The consumption of test and measurement equipment constitutes a relevant indicator of investment in electronics in France. As a rolling average over one year, the “test and measures” component of our index turned around in the third quarter after historic growth due to strong investments in the post-covid period. This growth could not continue at such a pace and is taking a “breath”, but factors specific to the market have also contributed to the slowdown. Particularly in the telecoms sector: while the deployment of fiber is almost complete, 5G, which remains a promising technology, has not yet taken off. On the other hand, there are significant investments in aerospace, defense and automobiles (mainly due to electrification), and we have world-class players in France.
• For production machines intended in particular for electronic subcontracting, we have seen a drop in orders and invoicing since the second quarter. This decline follows a year of strong investments in production equipment. The lack of visibility in major structuring projects slows down investments. We can reasonably envisage a recovery if major national and European projects come into action (automobile, space, defense, energy). However, the shortage of qualified labor has become a major concern for the profession because in certain cases it goes so far as to compromise production. This is a reminder of the immense need for training to meet the ambitious reindustrialization objectives set by public authorities.
• While the long-term outlook remains favorable, we can only emphasize here too that overstocks, inflation, rising interest rates and international tensions have an impact on confidence whatever the area and induce general caution in terms of investment.