Connectivity Spells Growth for Electronic Components

The 50^th anniversary of Electronica was a global event, bringing together the largest crowd in history for the biannual trade fair in Munich, Germany, earlier this month. From the perspective of electronics manufacturers and the distributors who support them, the growth forecast for the semiconductor and electronics industry continues to gain momentum globally. Although regional economic conditions cast shadows over the positive outlooks, the industry growth remains solid and sustainable due especially to the component forecasts rooted in the rising importance of the Internet of Things (IoT).

Connectivity in the Spotlight

The themes on the trade show floor echoed over and over again the role of connectivity, global platforms, and the number of components supporting the new IoT era. Embedded integrated circuits (ICs) and systems are moving the industry forward and have a solid, sustainable forecast supporting an increasingly diversified market and set of end-devices. Smart devices are no longer just the smart phones in our pockets; rather, they are an expanding group of devices and systems that support connectivity and machine-to-machine (M2M) data exchange. At Electronica, the recurrent theme from electronics manufacturers was the solution systems that target a diversifying number of markets. These markets each have specific feature requirements, yet still demand unified connectivity solutions with low-power demands and smaller footprints.

Connectivity is not the demand of consumer electronics (CE) alone; it also is a critical element in the strength of the overall forecast for sustainable and positive growth. On display at Electronica were numerous IC solutions for industrial electronics, automation (from home and industry uses to municipal and energy management), medical devices (particularly single-use, remote devices), and automotive infotainment. These solutions highlighted the diversity of the market applications and the commonality of IoT connectivity and interoperability demands.

Smart is IoT

As we took in the many solutions on display at Electronica, the dominance of IoT for increasing smart device capabilities was everywhere. Given that Electronica is hosted in Europe, where municipal efforts to improve environmental sustainability are at the top of government-supported agendas, attendees were able to learn about many SmartCity and SmartLife solution advances. The solutions leveraged are extending existing component systems into a wider set of end-devices, from wearables to automobiles and industrial equipment.

Connecting diverse systems is the essence of IoT. Though M2M remains a constant, the machines themselves are more varied and require greater interoperability and increased security. A prime example of these interoperability challenges is in vehicle-to-device (V2X) and vehicle-to-vehicle (V2V) situations. The solutions displayed support instrumentation updates and displays, data transfer for real-time traffic flow, user-defined navigation, and shifting external and internal vehicle environments. There are many component systems and new packaging solutions (including materials) that are involved in this growing market. As Victoria Kickham underscored in her recent article, "Today's call for high-tech infotainment systems in cars and trucks is spurring new demand for electronic components among automobile manufacturers." The demand for automotive solutions is not just about increased volume; it is about electronics-intensive solutions to meet increasingly sophisticated on-board features. As Kickham continues, "Such advances are causing suppliers to step up their attention to the automotive market." At Electronica this year, the growing importance of automotive market solutions was clear.

SmartLife and IoT are not restricted to in-home or in-office solutions. The seamless transition for users through their daily routines and locations is not just the goal, but the demand from the market. The challenge for manufacturers, OEMs, and the solution partners supporting them is how to provide the deepest and most extensive knowledge of the complex supply chain. This knowledge is the foundation for flexible solutions and market agility that opens the door to competitive advantages.

More Challenges for Manufacturers

Manufacturers and OEMs face similar challenges across regions and markets. Many of them are expanding into new locations and new competitive situations that demand a depth of local knowledge that may not be part of their core. Such challenges create a need for services that extend manufacturers’ and OEMs’ positions and capabilities across the global supply chain. This is a refrain we heard over and over again at Electronica. Outsourcing for global solutions is on the rise, in check with the growth in IoT and the demands on components that support this new era of interoperability.