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After two years of turbulence — marked first by the great post-pandemic shortage of 2021-2022, then by a severe inventory correction cycle in 2023-2024 — the global electronic components industry enters 2025 in a particular state of mind: cautious, but resolutely forward-looking. The rebound is real, but uneven. Some segments are booming while others are still stagnating. And against a backdrop of persistent geopolitical tensions, the entire sector is reinventing itself.
1. The 2024 Review: A Painful “Reset”
To understand where the sector stands today, we need to look back at what 2024 actually was: a year of painful correction. After the excessive orders placed in the panic of the 2022-2023 shortages, manufacturers spent most of the year working through surplus inventory. Nick Wood, Sales Director at Insight SiP, summed up the situation well at the start of 2024: “2024 will be a reset year, with largely stable revenues for many suppliers as the post-pandemic supply chain effects dissipate.” (Lembarque.com, February 2024)
The numbers confirm this diagnosis. In France, Acsiel’s Q1 2024 barometer recorded a 4% decline in the components and consumables index compared to the previous quarter — a 13% drop year-on-year. Semiconductors, passive components, and connectors all dragged the index down. A weak construction sector, the slowdown in electric vehicle uptake (with anticipated volumes slow to materialise), and fierce Chinese competition in certain segments made the picture even grimmer. (Acsiel / VIPress.net, July 2024)
On the European majors front, signals were equally negative: STMicroelectronics anticipated a 5.2% decline in its median revenue for 2024, while Infineon projected an 11% contraction in Q1. (ChannelNews, February 2024)
Yet at the global level, the overall picture is less bleak. Every single month of 2024, the semiconductor industry recorded double-digit year-on-year sales growth. In January 2024, global sales reached $47.6 billion, up 15.2% from January 2023, according to the Semiconductor Industry Association (SIA). (Groupe GA / IC-Golden.com, January 2025)
2. The Engine of Recovery: Artificial Intelligence
If one segment is pulling the entire industry upward, it is unquestionably AI chips. Demand from hyperscalers (Microsoft, Google, Amazon, Meta) equipping their data centers has continued to accelerate, propelling NVIDIA to the status of the world’s most sought-after stock. Foxconn CEO Young Liu stated early in 2024 that he expected “the AI chip shortage to continue through 2024 due to limited server chip production capacity.” (ChannelNews, February 2024)
This dynamic is creating a rift within the market itself: on one side, a persistent shortage and sustained prices for high-end GPUs and AI chips; on the other, overcapacity and margin pressure in more mature segments (passive components, consumer microcontrollers, traditional automotive components).
Gartner forecast a 16.8% rebound in global semiconductor revenues to reach $624 billion in 2024 — growth driven largely by this AI boom. (ChannelNews, December 2023)
For 2025, the outlook is positive but mixed. The WSTS (World Semiconductor Trade Statistics) projects 12.5% growth in the global market, reaching $687 billion, driven by memory and logic chips. In Europe, expected growth remains more modest — single digits — while the Americas and Asia-Pacific should post significantly stronger rates. (Groupe GA / IC-Golden.com, January 2025; Kitron / Electroniques.biz, June 2024)
3. New Geopolitical Dynamics: From Shortage to Sovereignty
The harsh lesson of 2021-2022 was clear: in the world of electronic components, geographic dependency is a systemic risk. The vast majority of advanced chip production is concentrated in Taiwan, at TSMC, which manufactures most of the cutting-edge semiconductors for Apple, NVIDIA, and AMD. Tensions between Beijing and Taipei remain high, and this concentration is alarming governments and industry players alike.
The response has been political and massive:
- United States: The CHIPS and Science Act of 2022 mobilised $52 billion in subsidies to reshore manufacturing on American soil. From April 2024 onward, the first concrete tranches were announced: $6.6 billion for TSMC (Arizona), $1.375 billion for GlobalFoundries (New York). However, manufacturing in the US costs 3 to 4 times more than in Taiwan, and a shortage of skilled labour remains a major obstacle. (Le Monde Informatique, December 2023; Investing.com, April 2024)
- Europe: The European Chips Act, backed by €44 billion, aims to bring Europe’s share of global chip production to 20% by 2030. An ambitious target, given that the continent is starting from a very low base. By September 2024, some industry players were already calling for a “Chips Act 2.0,” noting that the first version had mainly served to “highlight the problems” without yet solving them. (Generation-NT.com, September 2024)
- China: Beijing is investing heavily in local factories to achieve technological self-sufficiency. Over the past three years, its share of global chip manufacturing has increased by nearly 50%, reaching approximately 18% of global supply. (Le Monde Informatique, December 2023) Meanwhile, US export restrictions on the most advanced AI chips to China have created a paradoxical dynamic: Chinese tech giants (Alibaba, ByteDance, Tencent) continue to eagerly purchase NVIDIA chips adapted to export rules (such as the H20), lacking competitive local alternatives in the short term.
4. Growth Segments and Segments Under Pressure
The electronic components market is not monolithic. In 2025, some segments are clearly driving growth while others are struggling to emerge from the cyclical trough.
High-growth segments:
- AI chips and data centers: driven by massive hyperscaler investments.
- Automotive electronics (ADAS, EVs): electric vehicles are incorporating ever more semiconductors (over 1,000 power modules per vehicle on average). Demand for SiC (silicon carbide) components is surging for energy management systems. (Mordor Intelligence / Marketgrowthreports.com)
- 5G and connectivity: 5G infrastructure rollouts are sustaining strong demand for high-frequency RF components.
- IoT and smart home: more than 20 billion IoT endpoints expected to be deployed globally, each requiring multiple components. (Global Growth Insights)
Segments under pressure:
- Passive components and connectors: overproduction, Chinese competition, margin pressure.
- Industrial and building electronics: weak conditions in the residential construction sector are weighing on home automation.
- PCBs (printed circuit boards): after a 15% production decline in 2023, the recovery is gradual. Capacity is abundant in China, while Europe and the US are focused on ramping up their defence industry output. (Kitron / Electroniques.biz, June 2024)
5. Persistent Structural Challenges
Despite the rebound, several structural vulnerabilities continue to weigh on the industry:
Cyclical volatility. The semiconductor industry remains deeply cyclical. Kitron, a specialist subcontractor, puts it bluntly: “component availability has greatly improved, but the market remains very difficult and almost all other factors affecting prices are moving in the wrong direction.” (Electroniques.biz, June 2024) The risk of a new mini supply crisis in the event of a sudden demand rebound remains real.
Lack of visibility. The prolonged inventory correction has generated a deficit of visibility on long-term orders, making forecasting highly challenging for component manufacturers. Lead times can lengthen “very quickly when global demand growth absorbs available inventory.” (Kitron)
Raw material price pressure. French manufacturers are facing rising prices for copper, tin, and gold, while at times being forced to cut their selling prices to keep factories running — a particularly painful squeeze in the passives segment. (Acsiel / VIPress.net, July 2024)
Skills shortage. Recruitment difficulties span all profiles — technicians, operators, engineers — and represent one of the key constraints on ramping up production, including for the most ambitious reshoring projects. TSMC in Arizona experienced this firsthand, pushing back the opening of its second plant from 2024 to 2025. (Le Monde Informatique, December 2023)
6. Outlook: A Market in Deep Restructuring
By 2032, the global electronic components market could reach $847 billion (up from around $394 billion in 2024), according to Fortune Business Insights — a near-doubling in less than a decade. Asia-Pacific is expected to maintain its dominance with around 37% market share.
But beyond the numbers, a structural reshaping is underway. Global supply chains, once optimised purely for cost, are reorganising around resilience and sovereignty. Governments have become direct actors in the industry. Geopolitics has entered the boardrooms of chip manufacturers. And artificial intelligence, by creating an almost insatiable demand for computing power, has reshuffled the deck among all players.
For European and French players, the challenge is twofold: participating in this rebound while building an industrial base that is less dependent on Asian supply. That is the challenge underpinning the European Chips Act, as well as champions like STMicroelectronics and Soitec, which are developing advanced technologies for the automotive and space markets. (Major Prépa, November 2024)
Summary
| Indicator | Status (Feb. 2025) |
|---|---|
| Global semiconductor market 2024 | ~$588B (+~15% vs 2023) |
| WSTS 2025 growth forecast | +12.5% → ~$687B |
| Total electronic components market 2024 | ~$394B |
| Main growth driver | AI chips / data centers |
| Main segments under pressure | Passive components, PCBs, industrial electronics |
| Major geopolitical risk | TSMC concentration in Taiwan |
| Policy response | CHIPS Act ($52B), European Chips Act (€44B) |
Sources
- Semiconductor Industry Association (SIA) — monthly global sales data: semiconductors.org
- WSTS (World Semiconductor Trade Statistics) — 2025 forecasts: wsts.org
- Gartner — semiconductor market forecast 2024 (ChannelNews, December 2023): channelnews.fr
- Acsiel — Electronics barometer Q1 2024 (VIPress.net, July 2024): vipress.net
- Kitron — Electronic components market watch (Electroniques.biz, June 2024): electroniques.biz
- Nick Wood / Insight SiP — Industry outlook 2024 (Lembarque.com, February 2024): lembarque.com
- Groupe GA / IC-Golden.com — Electronic components industry outlook 2025 (January 2025): ic-golden.com
- Fortune Business Insights — Global electronic components market size: fortunebusinessinsights.com
- Le Monde Informatique — CHIPS Act: status report (December 2023): lemondeinformatique.fr
- Generation-NT.com — Chips Act 2.0 and European strategy (September 2024): generation-nt.com
- ChannelNews — Semiconductor rebound, AI chip shortage (February 2024): channelnews.fr
- Major Prépa — Semiconductors 2025, geopolitical stakes (November 2024): major-prepa.com
- Mordor Intelligence — Power electronics market: mordorintelligence.com
