Understanding the Electronics Sector

Manufacturing for the Electronics Sector

In the last few years, the UK electronics sector has been buoyant.

The manufacture of electronic components, devices, and equipment has played a big role in improving the health of the overall UK manufacturing sector.

Recently, the UK electronics sector has experienced the fastest growth of any manufacturing sector, with two thirds of all UK manufacturing being fuelled by the electronics industry.

Whilst still only accounting for a small amount of the total UK manufacturing sector (approximately 5%), the electronics industry is seeing its market size increase steadily. Annual revenue for the electronics sector has increased for four of the past five years. 

The key reason for this growth has been the steady increase in demand for electronic products by other sectors in the UK. As we all become more technologically reliant, several other key industries have increased their demand for electronic components. 

Electronics manufacturers have benefited enormously from growth in these other sectors. The mobile technology market, for instance, has seen a huge explosion in the 21st century. 

Key industries include:

  • National and local government
  • Telecommunications
  • Tech and digital companies
  • Automotive
  • Medical
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This success has attracted the interest of a number of overseas companies, many of whom have sought to invest in British-based electronics companies. Amongst foreign investors, the US has made the biggest contribution to the sector. Its total investments in the UK account for 44% of all foreign-owned electronics companies.

Behind the US, Germany has a 10.3% share of the UK market, with Japan in third place with a share of 7.6%.

The presence of overseas companies has positively affected turnover for the industry. The UK electronics sector has a higher share of companies with a turnover of more than £1 million than other non-electronics manufacturing industries. For the electronics sector, these companies account for 22.9% compared to 18.8% of the wider manufacturing sector.

Injection Moulding Electronics Component

The electronics sector is one of the top UK investors in Research and Development (R&D) activities in the entire manufacturing industry. Only the medical and transport sectors invest more in R&D.

Electronics contributes almost 15% to the total manufacturing spend for R&D activities. 

This expenditure has been rising rapidly over the last decade, as the sector looks to invest in new technologies and solutions. 

Total spend has risen in the past 10 years by over 70%. This huge increase reflects the continued rise in productivity in the sector, the opportunities for growth, and the great demand for electronic devices, components, equipment, and accessories in the UK.

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