Electronic components, modules and subsystems market: trends and prospects

While the microelectronics industry experiences some ups and downs, both globally and in Russia, it is on an overall upward trend

This is especially true as we enter a new age of automation and widespread digital adoption. As we navigate a rapidly evolving technological landscape characterized by automation and digital transformation, this economic sector has exhibited steady growth, proving resilient to localised economic challenges. In this context, let's explore the key trends and what's on the horizon for the global and Russian markets for electronic components, modules and subsystems.

Global Electronics Market Booming: A $1 Trillion Future?

The global microelectronics market is a powerhouse, reaching an estimated $527 billion in 2023. By 2030, it could balloon to over $1 trillion under optimistic conditions, reflecting a significant rise in its contribution to global GDP (from 0.2% in 1990 to nearly 0.6% in 2023).

This growth is driven by surging demand for electronic components across industries. From manufacturing to healthcare, "smart" solutions are becoming essential. As a result, the electronics share of product value is rising; it's jumped from 19% to 34% between 2002 and 2022.

What are consumer preferences? Digital information systems (44%) and memory chips (23%) dominate the market, accounting for two-thirds of sales. This trend is likely to continue until 2030. Telecommunications (30%) and computing (26%) are the leading consumer industries, soaking up nearly 60% of the demand.

Here's a glimpse into the unique structure of this market:

Concentration: Despite a vast number of players, only the top five control around 40% of revenue.
Geographic Split: While design and development are concentrated in the US, manufacturing is dominated by Southeast Asian countries (China, Taiwan, South Korea, and Japan)

However, recent events are shaking things up. The pandemic exposed vulnerabilities in Southeast Asian production, leading to component shortages. To avoid future disruptions, many countries are now actively promoting local electronics production through subsidies and other incentives.

Russia's Booming Microelectronics Market

The Russian microelectronics market is on a roll, with a market size of approximately 289 billion rubles ($4.1 billion) at the end of 2023. It has been experiencing steady growth, averaging more than 22% annually over the past few years. This growth is fueled by two main factors: the increasing demand for electronic components driven by digitalization across all sectors, and significant government support measures for the domestic microelectronics industry.

Ambitious Goals for the Future

Optimists predict a bright future for the Russian market, with projections suggesting it could reach a staggering 1 trillion rubles ($14.2 billion) by 2030. Even more impressive, domestic products are expected to capture a dominant 70% share of the market by then.

Key Differences from the Global Market

The Russian market has some distinct characteristics compared to its global counterpart. First, there's a much higher level of consolidation. The top 5 players control a whopping 80% of the market revenue. Second, the product mix differs. Digital information systems reign supreme in Russia, accounting for 64% of the market compared to the global average of 44%. Memory chips, on the other hand, play a less prominent role (6% vs. 23% globally).

Looking at consumer industries, we see another significant difference. Russia's microelectronics are primarily used in the industrial sector, a staggering 66%. This stands in stark contrast to the global market, where computing and communications consume a much larger share (56% combined). This reflects a lower level of domestic production in these areas within Russia.

Challenges and Opportunities

Despite its impressive growth, the Russian microelectronics market faces significant challenges. A crucial hurdle is the lack of advanced technologies and production capacity. This gap could lead to Russia falling behind global leaders in technological innovation. Another challenge is the ongoing, albeit decreasing, dependence on foreign electronic components. Finally, the industry suffers from a shortage of skilled workers, including engineers and production personnel, which could hinder its growth potential.

The good news is that significant efforts are underway to address these challenges. The government is heavily invested in the industry, with a dedicated program allocating 3.5 trillion rubles until 2030. A substantial portion of these funds are earmarked for research and development to close the technological gap.

Technoparks, which integrate research and manufacturing, are another crucial element. These hubs combine scientific exploration with production capabilities. A prime example is Russia's technoparks, home to industry leaders like Shvabe Holding, Mikron JSC, and Angstrem JSC, key players in the microelectronics sector.

These centers foster collaboration and offer tax breaks, allowing companies to optimise costs and focus on developing innovative products. Finally, international collaboration with leading foreign players is seen as a way to combine Russia's engineering expertise with global know-how, accelerating progress in the industry and allowing new players to gain a foothold in the Russian market.

In conclusion, the future of Russia's microelectronics market appears promising. However, to achieve its ambitious goals, the industry must effectively address the challenges it faces. By leveraging government support, fostering innovation, and collaborating with international partners, Russia has the potential to become a major player in the global microelectronics arena.

Why ExpoElectronica 2025 is a Must-Attend for Your Electronics Business

Reach a Massive Audience of Serious Buyers: ExpoElectronica is the premier industry event, attracting the biggest names in electronics manufacturing and IT. In 2024 alone, it connected 760 exhibitors with a staggering 22,473 visitors actively seeking new partners.

Target the Right Decision-Makers: The "Electronic Components, Modules and Subsystems" section is a major draw, attracting over 13,211 specialists in 2024. This targeted audience puts you face-to-face with potential customers who are actively searching for innovative solutions.

Showcase Your Latest Innovations: ExpoElectronica 2025 (April 15-17, Moscow, Crocus Expo IEC) provides the perfect platform to unveil your cutting-edge developments in electronic components, modules, and subsystems. Directly demonstrate your products to key decision-makers and generate valuable leads.