Sector Information

Quick Facts

  • The UK electronic systems industry is worth approximately £80 billion a year and the fifth largest in the world in terms of production.
  • Over 850,000 people, 2.9% of the UK’s workforce, are employed within the electronic systems community

source: ESCO Report 2013

  • The UK is a centre for global electronics development companies with major research and development or manufacturing bases – for semiconductors almost 80% of the activity comes from foreign direct investment.
  • The UK is home to 40% of Europe’s semiconductor design houses.
  • UK has a high content of analogue, mixed signal and RF capability

Microelectronics Industry Primer

The truly global nature of the microelectronics industry is a result of decades of evolution since the invention of the transistor and the integrated circuit. Today we see a number of dominating trends that drive and shape the technological and commercial landscape including:

Electronics Are Increasingly Pervasive In Everyday Life

Microelectronics underpins virtually every single industrial sector either directly or indirectly. The market size of the microelectronics business chain in 2005 represents nearly 1% of the entire world’s GDP with an annual average growth rate of approximately 15%. Taking into account the many other industries that depend on electronics (such as aerospace, automotive, consumer, defence etc.), the global value leverages some €5,000 billion.

Rapid Technological ChangeGlobal Statistics

Forces of competition, convergence (computing and communications, hardware and software technologies etc.) and the attraction of world markets yields relentless technological advancement.

The Cyclical Nature Of The Industry

Commercial and technological cycles that move at different rates, and at times with punctuated change, bring about a highly cyclical, yet difficult to predict, industrial cycle.

Globalisation And Disaggregation Of The Supply Chain

Not only major product producers, but the majority of SME’s in the industry are leveraging suppliers of manufacturing, design, research and services from the most effective sources around the globe.

Shorter Product Life-cycles

Market dynamics have witnessed the growth in demand for commercial and consumer products. The nature of these markets are different from the historical demand and major characteristics include lower costs and reduced life expectancy of products, yielding shorter product life cycles.

Competition & Competition Intensity

The nature of participating in a truly global industry exposes organisations to high levels of competition where differentiation is mandatory. Increasing costs and the economics of supply often dictate that players need to command a significant share of the total available market.

These pressures often yield a concentration of suppliers in end market segments with ownership among larger and often foreign-owned organisations.