In order to gain a solid understanding of the worldwide electronic components marketplace, one key segment offers unique insight: the microprocessor market.
Microprocessor data allows a bird’s eye view of worldwide PC and smartphone demand, manufacturer supply chains, consumer preferences, and projected revenue growth for the entire worldwide economy – just to name a few critical factors.
How well the microprocessor market does greatly impacts the overall electronic device trends. Microprocessors, more than any other electronic accessory, is the sure-fire “tell all” for both current and future economic trends. And with emerging consumer marketplaces in countries like China and India, there are more variables than ever involved.
Sourcengine™ knows how important microprocessor market trends are for you and your business. With that in mind, we put together some key data points, market trends, and other indicators to keep an eye on for 2020 and the years ahead.
Microprocessors and the Electronic Components Micro-Economy
Toward the end of the 2010s, the white-hot microprocessor market seemed due for an inevitable correction – that is to say, would surging demand for microprocessors (in both the developed world and emerging economies) outgrow manufacturer and distributor ability to keep pace? It was a question everyone from economists to electrical engineers wanted to know?
Thankfully, increased manufacturing supply chains in the U.S. and East Asian markets met the challenge, and then some; in mid-2019, the worldwide microprocessor marketplace, already around $7.5 billion, was projected to increase to nearly $9 billion by the mid-2020s. This impressive compound annual growth rate (CAGR) of over 2% quickly allayed fears of a coming microprocessor crash.
Recently, a more optimistic prediction surfaced, this time from Data Bridge Market research: by 2026, the CAGR projection increased to 3.01%,which would put the global microprocessor market much closer to $10 billion.
This sunny outlook seems to contradict a few negative trends in recent years, namely:
- International tension through trade wars and tariff imposition, particularly with the U.S. and China
- Slower than expected consumer electronic demand from the Indian consumer market
- Supply chain challenges with an aging Chinese workforce
- Fears of a global economic slowdown (based more on inevitable historical, cyclical-based data more than actual on-the-ground economic conditions)
These trends fly in the face of a $10 billion microprocessor marketplace, and the Data Bridge Market paper was published before an ominous development that could disrupt supply chains for microprocessor manufacturing across the globe: the recent outbreak of the Coronavirus (COVID-19), which started in the strategically important city of Wuhan in Central China. Apple, Samsung and other microprocessor-dependent companies rely on relatively cheap, reliable Chinese manufacturers to keep supply chains moving along, even in the face of considerable global demand.
Does the Coronavirus change the current microprocessor market? How will it impact future trends in the electronic component marketplace?
It’s hard to project the exact impact of a global pandemic like a virus.
What’s certain is this: Whatever challenges global disruptions (even including the Coronavirus) cause to the microprocessor marketplace, optimistic trends are achievable, simply because this sub-sector of the global economy is diversified and flexible enough to keep the arrow pointing up. The microprocessor manufacturer pool is exhibit A. Sure, any supply chain problems encountered by firms like Qualcomm, Intel, NXP, IBM, NVIDIA Corporation and Advanced Micro Devices are sure to pose a threat to global supply.
However, a growing segment of lesser-known manufacturers (Arm Limited, ZOTAC, VIA, ASUSTeK, and Matrox, just to name a few) provide a “safe cushion” of complementary manufacturing and distribution capability that simply wasn’t possible in previous years.
And thanks to growing demand for IoT devices, connected automobile components and smartphones (5G deployment is just around the corner for the majority of the globe), we expect generally positive trends for the microprocessor marketplace in the early 2020s. While challenges exist, the microprocessor market – including the associated manufacturer, distribution, and consumer sectors – is mature and robust enough to keep that $10 billion mark on track for the mid-2020s.
For procurement specialists and other supply chain professionals, Sourcengine is also robust and innovative enough to keep your electronic component costs under control. Leverage the worldwide supply chain with up-to-the-minute deals. Harness the power of a true e-commerce marketplace for microprocessors and more. To see our advanced supply chain software in action, schedule a demo today. If you’re ready to elevate your procurement effectiveness, sign up today!