To start 2025, we spoke to our Group CEO, David Yodaiken, who shared his industry predictions for the year ahead. He covered a range of topics, based on his industry knowledge and years of expertise, to give a full overview of what he expects this year.
The electronic components market has been nothing short of unpredictable in recent years. Since the COVID pandemic, we have seen an unprecedented level of volatility, with sharp ups and downs affecting every facet of the industry.
Looking ahead to 2025, I believe we are entering a period of significant growth. This will be driven by the ongoing expansion of AI, increasing demand for semiconductors, and shifts in supply chain dynamics due to geopolitical and sustainability considerations.
AI is evolving at a faster pace than almost any other technology. Its growing influence demands vast resources in terms of semiconductors and computing power, especially for data centres. But the challenge is that global foundries have limited manufacturing capacity. This means prioritisation becomes key—when demand spikes in one area, something else has to give. For example, with so much investment going into AI technologies and chip design, other sectors may see increased lead times.
Adding to these pressures is the growing issue of obsolescence in the electronics industry. As manufacturers prioritise more profitable product lines, older designs are being phased out faster than ever. Rapid technological advancements, shorter product lifecycles, and shifting market demands contribute to this trend, while changes to regulations and supply chain disruption cause issues for those trying to keep up.
The semiconductor market itself is expected to see extraordinary growth in 2025. Some analysts are forecasting over 23% growth in sales per share and nearly 38% market share increases for semiconductor companies.
This surge is fuelled by more than just AI—consumer electronics are still a driving force. People are buying smartwatches, smart home devices, and even robots for domestic tasks like mowing lawns. The sheer number of smart devices in our lives today is unprecedented, and this demand will cascade through the semiconductor supply chain.
Technological innovation is another exciting area. Flexible electronics, wearable tech, and advancements in 5G are opening new doors. These technologies mean products like smart clothing embedded with sensors or ultra-efficient wearable devices could hit the market soon. While these advancements are thrilling, they add another layer of complexity to supply chains already stretched thin.
On the supply chain side, there is a strong push toward diversification and sustainability. Consumers are more informed than ever and want transparency about where the products that they buy come from and their environmental impact. Manufacturers are responding by adopting eco-friendly practices and investing in technologies to improve supply chain visibility. But let’s be honest, balancing sustainability with the realities of production is no small task. It is a paradox—while consumers want more electronics, they also want to know those products are sustainable. That tension is going to shape how supply chains operate.
Geopolitics will also play a major role in the year ahead. We are seeing facilities being built in the US, Europe, and other parts of Asia, aiming to create more resilient, localised supply chains. The goal is to reduce vulnerabilities caused by global events like pandemics or natural disasters. While this should lead to fewer shortages and a stronger supply chain, the transition comes with its own set of challenges.
Furthermore, the coming year may bring shifts in international trade policies, with discussions around potential new tariffs and their impact on global commerce gaining attention. Any changes could influence the movement of goods, supply chains, and economic activity, creating a period of adjustment for businesses and industries worldwide. As these developments unfold, the focus will likely remain on balancing domestic priorities and geopolitical relations.
At Cyclops Electronics, we are preparing for these shifts by broadening our horizons. Over the past year, we have made three acquisitions, all aimed at diversifying what we can offer our customers. Historically, we have been known for sourcing hard-to-find electronic components, and while that is still a core part of what we do, we have evolved. Now, we are focusing on providing a wide range of supply chain solutions—whether that is kitting, outsourced electronic assemblies, or tailored partnerships that address specific customer needs.
Our mission is about working closely with our customers to solve their unique challenges. For some, that still means finding elusive or obsolete components. For others, it is about streamlining supply chains or offering value-added services. Our goal is to help our customers navigate the complexities of this industry with confidence. We want to know how we can best solve their headaches. Our customers will see us doing that in new and innovating ways this year.
If I have learned anything from recent years, it is that resilience and adaptability are key. The Cyclops Group is ready to embrace the opportunities ahead and help our customers do the same.
