The Roller Coaster Continues into 2023
An Industry Outlook from Symmetry Electronics’ Director of Sales & Engineering, Keith Nesrsta.
Wednesday, January 11, 2023
Despite what financial analysts are calling a recession, the electronics engineering community is grateful that the need for costly redesigns is coming to an ‘end’ as component shortages improve. As a Symmetry Electronics sales director working directly with expert engineers, I am equally excited to begin working with customers on new innovative products in 2023 and beyond. The past few years have been challenging for electronics sales when most of your time was spent in operational tasks, but the outlook for 2023 is bright and ripe with opportunity.
The State of Supply Chain and Logistics
While I am cautiously optimistic, the global supply chain is still volatile. There are some semiconductor wafer nodes that are showing signs of stability, but larger transistor nodes are still in short supply. Supply chain disruptions continue to have an impact on our customers and how they innovate moving forward. Additionally, there are some segments in the electronics industry that will be affected by the high inflation rate or the post-pandemic lack of demand for some products. In 2022’s third-quarter financial reports, we saw this reflected by companies in the personal computers and consumer sectors of electronics industry. The global economy is also in flux due to the turbulent situation in China, Taiwan, and the War in Ukraine. All these factors will result in varied growth potential for customers in the different electronic segments and regions.
What Does the Semiconductor Slowdown Mean for the Electronics Industry?
The November updated from WSTS (World Semiconductor Trade Statistics) reported that the projected growth rate in semiconductors has slowed and is expected to be just above 4% in 2022. After 2021's growth of 26%, the slowdown is helping the supply chain catch its breath. Inventory position and semiconductor devices coming off allocation improved in the fourth-quarter. Signs are showing that this trend is expected to continue into 2023. The improvements in supply for smaller geometry wafers is allowing our customers confidently innovate with new, improved products and meet potential future demand.
The current economic environment is going to impact the semiconductor growth rate in 2023, but it will not be universally applied across all industries and regions. WSTS is reporting that there will be an overall decline of 4% in semiconductor sales. Memory is a key contributor in this decline with a 17% drop from 2022. The downturn follows a similar trend in 2022 where growth in memory devices was also negative. However, the good news is that other categories of semiconductor devices such as analog, sensors, and logic are expected to grow – albeit at single digit rates. Asia will continue to have challenges and is estimated to decline, but other global regions are expected to stay consistent.
2023’s Outlook for Other Electronics Segments
There will be some electronics segments that will continue to remain strong and have decent growth. For example, the industrial electronics segment continues to remain healthy. Other markets showing signs of resilience despite the current macro-economic situation include networking, medical and commercial transportation, and the EV/charging market. B2B Enterprise had continued to remain strong but is likely to slow as corporations tighten their belts due to rising costs and slower growth.
What Does the 2023 Market Outlook Mean for Symmetry Electronics?
Symmetry is in a good position given the current market conditions. Our portfolio of products aligns well with the portion of the market where demand is still high. Symmetry's leading supplier partners are now meeting demand with their newest generations of products and our customers are confident in our support in developing new designs. Symmetry has broad customer base, and we are in a good spot to take advantage of the segments where growth is still expected in 2023. Semiconductor suppliers with overlapping customer bases will see similar results.
It has been said for the past three years, but 2023 will continue to be an interesting year and it will be hard to predict overall market outcomes as the roller coaster continues. Our world is now reliant on electronic systems and the essential benefits they provide. The number of microcontrollers per household, corporate office, and industrial facility has reached the exponential growth rate. Symmetry and our parent company, the Exponential Technology Group (XTG), is well positioned for 2023.
Curious about developing in 2023? Symmetry Electronics is uniquely positioned to provide the guidance you need for successful development for next year and beyond. Our expert team of Applications Engineers and advanced technical support are available throughout your design cycle. Contact Symmetry Electronics today for support in your 2023 design!