TTI MarketEye Executive report: What’s Ahead in 2024
Which OEM market sectors do you envisage as growth and which sectors will be in decline in 2024?
Lew LaFornara, Senior Vice President Product Marketing and Management: I see mil-aero/defense, space, commercial aviation and the medical OEM market segments continuing to expand with the explosive growth in AI leading the way in the high-end computing segment. Transportation will flatten or reduce slightly, though EV and electronics content growth will offset lower demand.
I expect continued weakness well into 2024 in the general computing, communications, mobile phone and consumer markets. And while the underlying trends for industrial are strong, we are seeing the weakening overall economy, higher interest rates/cost of money, continued inventory normalization and geopolitical concerns lead to a pause in spending and new investment.
Jeff Ray, Senior Vice President, Global Strategic Accounts: Compared to 2023, sectors that will yield the most pronounced growth will be the greater transportation/mobility, healthcare and industrial industries. Transportation/mobility sub-segment applications that will drive 2024 growth are drivetrain electrification, ADAS/autonomous, connectivity and EV charging. Healthcare growth will come through increases in diagnostic equipment and test and measurement equipment as well as patient monitoring and medication management applications. Industrial sector growth sub-segments include energy storage systems, renewable energy generation and transmission and infrastructure, including building technology and industrial automation. I see declining performance in 2024 for the connected device, handheld/ultraportable, 5G, cloud and network and storage market sectors.
What is the impact on component availability and pricing as a result of this growth and decline in the electronic component supply chain?
Lew LaFornara, Senior Vice President Product Marketing and Management: Lead times should come down and delivery performance improve in 2024, though component availability will remain tight in mil-aero/harsh environment sectors due to increased product demand and higher complexity. There will also be continued tight supplies in older technologies for chips and passives, and high-power/new energy/EV products will face continued challenges.
Pricing will be one of the biggest question marks of 2024. Customers are looking for price reductions/cost downs after years of high inflation, while suppliers experience cost increases as they look to recover to or maintain their historical profit levels. The result will likely be a leveling or increase of prices.
Jeff Ray, Senior Vice President, Global Strategic Accounts: Measured in lead-times and with few exceptions, electronic components have been more available in 2023 and that trend will continue in 2024. However, some more problematic products are critical to high growth sectors such as transportation, medical and industrial. Product availability in the commercial grade products heavily used in the declining communications and consumer market segments may have downward pressure on pricing in 2024. Today, given the amount of inventory in the channel either at distributors, OEMs or EMS providers, most component manufacturers are reluctant to offer lower prices because there are limited upside or available share gain opportunities.
