Introduction
The global economic downturn in 2023 took a toll on the components market, leading to inventory adjustments and price declines. As we enter 2024, with the global economy recovering and downstream application markets showing signs of improvement, the components market is expected to rebound overall. However, risk factors such as geopolitical tensions and the ongoing pandemic persist, and the accelerating pace of domestic substitution and inventory adjustments are adding to the complex and dynamic nature of the market.
How can overseas buyers adapt to the changing landscape, seize opportunities, and respond to challenges?
This article will analyze the market from the following perspectives:
1. Rebounding Demand with Diverging Trends Across Submarkets
Overall, global components demand is expected to rebound in 2024, but performance will vary across submarkets. Demand for components related to consumer electronics such as smartphones and PCs is expected to remain sluggish, while demand for components used in automotive electronics, data centers, and servers is expected to maintain strong growth.
For overseas buyers, it is important to closely monitor demand changes in submarkets, focus on high-growth submarkets such as automotive electronics, data centers, and servers, make early arrangements, and seize market opportunities.
2. Accelerating Domestic Substitution Puts Pressure on Imported Components
In recent years, driven by policy support and technological advancements in China, the competitiveness of domestic component manufacturers has been steadily increasing, accelerating the pace of domestic substitution. This means that imported component manufacturers will face greater competitive pressure and downward price pressure.
Overseas buyers should carefully consider the domestic substitution trend, evaluate their existing supply chains, and adjust their procurement strategies when necessary to increase the proportion of domestically sourced components to reduce procurement costs. At the same time, they should pay attention to the technical strength and product quality of domestic component manufacturers to ensure the reliability of purchased products.
3. Inventory Adjustments and Price Stabilization and Recovery
After inventory adjustments in 2023, component inventory levels have declined somewhat. As downstream demand recovers, manufacturers’ restocking needs will drive a market rebound, and component prices are expected to stabilize and recover.
Overseas buyers should make reasonable procurement plans, avoid blind stockpiling to reduce inventory risks. At the same time, they should closely monitor market price trends, adjust procurement strategies in a timely manner, and strive to purchase products at the most favorable price.
4. Unignorable Risk Factors
Geopolitical tensions, the ongoing pandemic, and other factors could impact the global economy and the components market. Additionally, global supply chain restructuring may bring new challenges.
Overseas buyers should strengthen risk management, establish diversified procurement channels, avoid over-reliance on a single supplier, and enhance supply chain resilience. At the same time, they should develop contingency plans and be prepared to respond to emergencies.
Conclusion
The components market in 2024 presents both opportunities and challenges. Overseas buyers should carefully analyze the market landscape, grasp market trends, take effective measures, turn risks into opportunities, and achieve cost reduction and efficiency improvement in procurement.
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