Electronics barometer #ACSIEL – 1st quarter 2024
Paris, April 3, 2024 – 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 1st quarter of 2024.
> Electronic components and consumables
Analysis
The Acsiel index of electronic components (semiconductors, passives, printed circuits, connectors) and consumables fell by 4% in the first quarter of 2024 compared with the previous quarter, representing a year-on-year decline of 13%. Semiconductors, passive components and connectors were the main items dragging the index down, while other products showed positive trends. Despite this, the index remains at a high level, comparable to that of the second and third quarters of 2022 and the third quarter of 2023. The momentum of semiconductor sales in France has been affected by a fall in distribution and a purely cyclical downturn in the aerospace/defence sector (after three quarters of strong growth). However, the outlook in this sector remains very positive for all electronic components, and for many players the problem is more one of delivering the quantities requested.
There are still surplus stocks of components in distribution, EMS and various industrial sectors.
The poor economic climate in the construction industry, particularly in the residential sector, is also having a negative impact, especially on home automation. Some players confirm that they are feeling a slowdown in the automotive sector, despite the growth in electric vehicles, with developments in new models that are not yet translating into large volumes, while demand is currently more focused on small internal combustion engine models, resulting in a lower electronics content. Finally, Chinese competition is fierce for our automotive and solar equipment customers.
Generally speaking, there is evidence of a downturn in the components and consumables market, and while an upturn is envisaged between now and the end of the year, it could be partly thwarted by the postponement of interest rate cuts and the Chinese surpluses that continue to affect demand.
Our manufacturers are having to contend with rising commodity prices (copper, tin, gold, etc.). Despite this, they are sometimes forced to lower their prices and margins to keep their factories running.
Recruitment difficulties remain a major concern, affecting all types of production profiles: technicians, operators and engineers.
> Test and measurement equipment, production machines
Analysis
In the first quarter of 2024, the Acsiel capital goods index for the electronics industry suffered a sharp sequential fall (-30%), following record growth in the fourth quarter (+56%). As a result, the year-on-year trend turned negative again (-17%).
As was to be expected, the market was adversely affected in the first quarter by the strong wave of investment at the end of 2023, some of which was carried out ahead of schedule. More generally, companies have noticed a cooling of the market since the start of 2024. Sales cycles are longer, and there is hesitation among some customers, leading to a wait-and-see attitude on the part of suppliers.
After a very good year in 2023, the automotive (particularly battery testing, electrification of the fleet, ADAS) and aerospace/defence (including R&D) sectors continue to be in good health. The nuclear sector is doing well, but this is a long-term phenomenon. In telecoms, on the other hand, the end of the investment cycle for mobile phone operators has been reached, and the roll-out of fibre in France is almost complete. Artificial intelligence, on the other hand, is having a positive impact on networks, as huge quantities of data need to be transmitted.
Companies that have repositioned themselves in buoyant markets, notably through acquisitions, are in a favourable position.
Talent training remains a key issue. Order books are full for short courses. In education, major efforts are being made to equip the technical establishments affected by the CIEL reform (Bac Pro and BTS electronics sections). On the other hand, there has been a reduction in spending on other sectors of education and research. However, manufacturers and importers of machines and components are facing recurring recruitment difficulties.