The Electrical Components Market size is analyzed to grow at a CAGR of 3.11% during the forecast 2021-2026 to reach $1383.94 billion by 2026. Electrical components of diversified ranges are imperative to several industries as they are responsible for controlling currents or voltages, and several other long-running advantages. The growth of the Electrical Components Industry is influenced by a number of prominent factors, such as rising penetration of industrial IoT for digital twins, advancements in semiconductor technology and popularity of the Stretchable Electronic applications. Electrical components are an indispensable part of every business sector, including industrial manufacturing, automotive, healthcare, aviation and many more. In addition, the avant-garde opportunities offered by the next generation electronic devices, such as smartphones, laptops, wearable electronics and bioelectrical devices continue to promote the growth of the market. Therefore, the surge of new age of technologies, pertinent to autonomous vehicles, bioelectrical devices, AI-powered computer assistants, and other array of innovations propelled the growth of the Electrical Components Market.
Electrical Components Market Segment Analysis – By Building Automation
By building automation, the Electrical Components Market is segmented into Building Automation, datacom accessories, security and Wiring accessories. Among them, security segment is analyzed to hold the maximum share of 40 % in 2020. The dominance of the segment is witnessed owing to government initiatives to promote the smart sensors owing to the rising concern of safety along with the growing adoption of smart home technologies. For Instance: According to World Bank Reports, Indonesia has shown significant growth in the investments done in industrialization and construction sector owing to different smart city projects and building automation programs. The investment was recorded to reach $435.91 billion in 2019. Also, Indonesia is pushing forward smart city solutions and has kicked off an ambitious digitalization program in 2017, named as the "100 Smart Cities Movement”. This initiative is also a part of the government’s plan to address urbanization issues, where about 83% of the Indonesian population will live in urban areas by 2045. Apart from solving the urbanization problem in Indonesian cities, improving the quality of life in a city is also considered as the primary goal. For instance, on September 2020, Mitsubishi Corporation entered into a partnership with Temasek Holdings to build a high-tech community near Indonesia's capital Jakarta. These initiatives will further enhance the Electrical components market growth in Indonesia. Other program such as Building Systems & Automation Indonesia Expo 2020 which aimed to strengthen intelligent ways of using electricity, to smart grids and metering, energy efficiency solutions, innovative lighting, building systems and automation, smart sensors and security and the latest in the most efficient HVAC and lifts offerings. Hence, all such factors would create growth prospects for the security segment.
Electrical Components Market Segment Analysis – By Lighting
By lighting, the Electrical Components Market is segmented into Fixtures and lamps & LEDs. Out of which lamps & LEDs is analyzed to hold the maximum share of 57 % in 2020. The growth of segment is attributed owing to the escalating adoption of LED lighting in both the urban and semi-urban provinces of the country. For Instance: In the present scenario, India is rapidly evolving from utilizing conventional products to LEDs. The LED lighting is being precisely adopted in residential, commercial and industrial sectors across the country. According to Electric Lamp and Component Manufacturers Association of India (ELCOMA) has estimated that India LED sector is estimated to reach around $216 billion by the end of the year 2020. Moreover, the Initiatives taken by the central government is positively influencing the surge and adoption of emergency lighting in India. According to Press Information Bureau (PIB) announcement by the end of the year 2019, there would be around 770 million LED bulbs & around 35 million LED streetlights that would be deployed to specifically replace conventional lights. The Indian central government has launched Deen Dayal Upadhyaya gram Jyoti Yojana under which 27.3 million LED bulbs are to be distributed to BPL households present in both the urban and semi-urban provinces. According to Press Information Bureau (PIB), over 2.1 million conventional lights have been precisely replace with the LED streetlights by the India central government under the street lighting National programmed launched by the government in the year 2016 which is further augmenting the growth of the segment.
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Electrical Components Market Segment Analysis – By Geography
Asia Pacific region is analyzed to be the major region with a growth rate of 3.58% in 2020 for the Electrical Components Market, owing to the promising penetration of smartphones, prominence of electronics manufacturing sectors, expansion of the IT and telecom sectors and government support for initiating IoT and LTE integration. In March 2021, Siemens completed the acquisition of C&S Electric in India. The acquisition motivates the operations of C&S Electric’s low- and medium-voltage power bush bars, low-voltage switchgear components and panels as well as protection and metering devices businesses in India. In order to address the competitive landscape across electrical, energy, transportation and other industrial sectors in this region, many business acquisitions are developing for effective market contribution. In March 2021, Eaton, Power management company announced that it has completed the acquisition of a 50 percent stake in HuanYu High Tech, a subsidiary of HuanYu Group, manufacturer of low-voltage circuit breakers and contactors in China, and throughout the Asia-Pacific region. The partnership offers several opportunities for both companies, and also influences Eaton to access the broader Southeast Asian market, in reference to the low-voltage electrical components business. Hence, the growing need to develop sustainable solutions through safe, reliable and efficient electrical solutions along with increasing consumer preference to smart and connected solutions, such as AI-powered computer assistants are some of the factors, which are observed to drive the growth of the Electrical Components Market in this region.
Electrical Components Market Drivers
Rise of Renewable Energy Solution
The eminence of renewable energy solutions, owing to the advancement of electrical components in reference to Heating, ventilation, and air conditioning (HVAC) technology is resulting in the growth of the Electrical Components Market. In April 2021, Durastar, a Ferguson heating and cooling brand launched its line of mini-split systems on the Power Equipment Direct family of stores. The latest product offers robust performance and 10-year parts warranty, installed by a licensed HVAC contractor. Furthermore, the increasing government’s focus on denoting renewable energy infrastructure, specifically in China, India and Japan accelerate the growth of the market. In February 2021, Japan Renewable Energy Corporation (JRE), a renewable energy project development company signed partnership with Tohoku Electric Power Corporation for successful investment in Onshore Wind Power Project infrastructure in Tohoku region. Therefore, the considerable governments funding to promote advancement in the renewable energy sector, along with the emergences of augmented reality technologies are observed to provide lucrative opportunities for the Electrical Components Market.
Large-scale adoption of Industrial Automation Solution
The Industrial Automation solution has been witnessing rapid advancement in recent years, which eventually highlighted the emergence of latest wireless devices and other industrial communication solutions, thereby driving the growth of the Electrical Components Market. In October 2020, the global supplier of IoT intelligent systems, Industry 4.0, and machine automation solution, Advantech expanded its line of device servers and Modbus gateways with the launch of the EKI-1521I-SC-A, EKI-1221I-MT-A, and EKI-1222I-SC-A. These Advantech solutions are fiber optics ports for providing enhanced connectivity in services, including long distance transmission as well as protocol conversion. Therefore, the expansion of industrial IoT for digital twins and augmented reality technology are some of the factors that are analyzed to drive the growth of the Electrical Components Market.
Electrical Components Market Challenges
Economic Impact by Covid-19 pandemic
The outbreak of Covid-19 pandemic represents as the twin challenges to lives and livelihoods. The implication of the pandemic to business is very disruptive, and most of the industry verticals, such as manufacturing, construction, power and other sector are witnessing economic complexities. Hence, these unexpected pandemic consequences brought severe repercussions to various electrical components, and impede the growth of Electrical Components Market.
Partnerships and acquisitions along with product launches are the key strategies adopted by the players in the Electrical Components Market. The Electrical Components Market top 10 companies include ABB Ltd, Sumitomo Electric Industries Ltd, Samsung Electronics Co Ltd, Qualcomm Technologies, Inc., NVIDIA Corporation, Broadcom, Inc., Huawei Technologies Co. Ltd., Emerson Electric Co, Taiwan Semiconductor, Toshibo Corporation, OMRON Automotive Electronics Co. Ltd. and among others.
In November 2019, Nidec Corporation completed the acquisition of OMRON Automotive Electronics Co. Ltd. and other associated overseas OMRON Corporation’s subsidiaries as per the stock purchase agreement, developed during April 16, 2019. The acquisition is mostly based on powering electric vehicles and other electrification trends to address the electrification requirement of the market.
In October 2020, Emerson Electric Co, the global leader of electronic & other electrical equipment announced the completion of the acquisition with Progea Group, an industry-leading provider of industrial internet of things (IIoT), plant analytics, human machine interface (HMI) and supervisory control and data acquisition (SCADA) technologies. The acquisition is formed to bridge a critical customer technology gap, and optimize successful digital transformation.
In December 2019, FDH, a portfolio company of Audax Private Equity (“Audax”) acquired BTC Electronic Components (“BTC”), a Wake Forest, NC based specialty distributor of high-performance connectors and accessories, which majorly focused on aerospace, military and industrial end markets. The strategic acquisition strengthens the product portfolio of FDH with electronic connectors of BTC.
In September 2020, the private investment arm of Select Equity Group, L.P. (“SEG”), Astor Place Holdings acquired a majority interest in Douglas Electrical Components, pioneered in custom-made, proprietary hermetic components and other interconnect solutions. The acquisition offers an excellent organic growth record to Douglas Electrical Components in developing comprehensive electrical connectors, hermetic wires and so on.
Asia Pacific region is analyzed to be the major region for the Electrical Components Market, owing to the promising penetration of smartphones, prominence of electronics manufacturing sectors and expansion of the IT and telecom sectors.
Heating, ventilation, and air conditioning (HVAC) technology is expected to emerge with high growing owing to the growing adoption of smart homes and related technologies.
The strong penetration of smartphone and other kinds of smart devices along with the prevalent demand of bandwidth connectivity are some of the factors that resulting to the positive impact on the market growth.
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