Forget joining a gym or starting a new hobby.
For many electronic manufacturers, one of the best New Year’s resolutions they can commit to is assessing their excess and obsolete (E&O) component stock. The new year presents the opportunity for a fresh start to make your business more efficient, profitable, and sustainable.
The International Data Corporation (IDC) anticipates that the semiconductor sales market will grow by 20% in 2024. This sentiment is echoed by SEMI’s most recent quarterly World Fab Forecast, which predicts that global semiconductor capacity will increase by 6.4% this year. While the excess in your warehouse may remain unchanged, the new year creates an opportunity to profit from stock that might otherwise end up in landfills.
Keep reading why Component Sense believes 2024 is the ideal time for electronic manufacturers to redistribute their E&O inventory.
1. Rise of AI hardware
If you felt like technology advanced in leaps and bounds last year, wait until you see what 2024 has in store. Artificial intelligence (AI) was the buzzword on everyone’s lips in 2023, and rightly so. AI has opened the door to a technological gold rush, with many new AI integrations and hardware going into production.
AI-driven personal computers, smartphones, and more will begin manufacturing over the next 12 months. The expected increase in hardware will drive up the requirement for microchips. Morgan Stanley expects 40% of laptops are due to be replaced this year, rising to 65% in 2025. As an electronic manufacturer, this puts you in a prime position to gain the best possible price when redistributing your E&O component stock. It’s a simple (and profitable) case of supply and demand.
2. Implications of COP28
In December 2023, the UN Climate Change Conference (COP28) saw nations make significant commitments to prevent global warming from reaching 1.5C above pre-industrial levels. Part of the discussions included plans for rapidly deploying zero-emission vehicles, and expediting the development and implementation of zero and low-emission technologies like carbon capture equipment. Similar to the rise of AI technology, an increase in green tech could also lead to higher demand for excess electronic components.
Another by-product of COP28 is the increasingly searing spotlight from the public on companies to operate more sustainably. In 2024, more than ever, electronic manufacturers would be wise to prove to customers that they are taking steps to reduce their impact on the environment. Reducing electronic waste (e-waste) by redistributing excess inventory can be one of the biggest strides you take this year.
For more inspiration on how your business can contribute to a circular economy, read our blog covering how Component Sense is championing the UN Sustainability Goals.
3. Recent government incentives
Even before COP28, the world saw groundbreaking government initiatives and funding to promote sustainable domestic production. One of these landmark plans was the Inflation Reduction Act of 2022 in the United States. As part of this bill, the U.S. committed to spending $369 billion on subsidies for green technologies. In 2022, the UK government allocated £90 million ($114 million) to promote green technology through its Net Zero Innovation Portfolio.
The electronics industry will continue to put these financial injections to good use in 2024. The global Green Technology and Sustainability market is expected to reach $60.7 billion by 2027 (up from $17.8 billion in 2022). This technology will require the production of electronic components, fostering favourable conditions for electronic manufacturers to generate effortless revenue by redistributing their E&O stock.
4. Component Sense’s partnership with DSV Global
Component Sense partnered with Danish transport and logistics company DSV late last year. With warehouse locations in over 80 countries, our new partnership with DSV makes 2024 the most accessible year to date for electronic manufacturers to consign their E&O stock.
DSV can act on our behalf to uplift excess inventory from your warehouse within 48 hours, wherever you are in the world. Then, your E&O stock will immediately be processed and advertised to our extensive network of over 4500 brokers. Your parts will be stored in a secure nearby location if your priorities change and you need components back quickly.
Make a fresh start with Component Sense
While the demand for electronic components may not be comparable to the Covid-19 lockdowns or ‘dot-com bubble’, our industry is expected to bounce back this year after a flat 12 months. Redistributing your E&O inventory has always generated effortless revenue you would otherwise not have. However, given the higher demand for parts, 2024 could sweeten the deal a little more.
At Component Sense, we offer three core redistribution options for electronic manufacturers, depending on their size and goals for the new year. By talking with us now, you can incorporate one of these options into your annual financial plan whilst reducing e-waste:
- InPlant™: Our complete solution lets us redistribute your excess electronic component stock from the comfort of your warehouse.
- Consignment: Free up warehouse space and recover component costs.
- Outright purchase: As it says on the tin. Fast, simple, and effective.
Many manufacturers are sitting on 10% of their revenue in excess. Make this the year you profit from it.