The electronic components sector remains one of the major global success stories of the last decade, according to a new global sector report from Euler Hermes, the global leader in trade credit insurance.
Costs and competition constraints, however, may impact future import potential that by 2015 is expected to rise by 9% to $43 billion. Once the star of world trade, it has now been eclipsed by Chemicals ($391 billion; + 21%) and Cars ($169 billion; + 22%).
Average prices of electronic components have halved in the last 10 years, and the supply and value chains are vulnerable. The globalisation of computer hardware that benefited Asia has become structural.
“The electronic components sector, currently located in Asia, clearly includes a risk of hyper-globalisation,” said Didier Moizo, sector advisor, Euler Hermes.
“Many sectors such as aeronautics, automobiles, chemicals, service providers and steel critically depend on electronic components. For example, in a catastrophe scenario a total disruption in the supply of semi-conductors could generate a global shock wave equivalent to USD 32 trillion (EUR 24.5 trillion), or half of global GDP.”
While China has tended to dominate the electronic components sector, generating import flows with neighbouring countries, new routes are also emerging. German imports of electronic components, for example, are increasingly coming from Romania and, to a lesser extent, the Czech Republic and Hungary. Morocco and Tunisia are also increasing their share of the IT component sector business in France, Italy and Spain.
“China will continue to suck up imports of electronic components, especially considering thee are particularly important to the industrial strategy being implemented, namely manufacturing more sophisticated products with greater value added,” continued Moizo.