Electronic Adhesives Market

Market Overview

The global electronic adhesives market was valued at USD 4.83 billion in 2023. It is estimated to reach USD 8.05 billion by 2032, growing at a CAGR of 5.85% during the forecast period (2024–2032). In recent years, with the ongoing digitization, there has been a rapid proliferation of consumer electronics like smartphones, laptops, and wearable devices, amongst others, which is a major driver of the electronic adhesives market. Moreover, the automotive industry's shift towards electric vehicles (EVs) and autonomous driving technologies increases the demand for automotive electronics, which is estimated to create lucrative opportunities for market growth. 

Electronic adhesives are specialized materials that bond, encapsulate, coat, and protect electronic components and assemblies. These adhesives are crafted to meet the specific demands of electronic applications, including electrical conductivity, thermal management, and environmental protection. They come in various types, such as conductive adhesives (both electrically and thermally conductive), non-conductive adhesives, UV-curable adhesives, and epoxy resins.

Electronic adhesives' primary functions include ensuring components' mechanical stability, facilitating heat dissipation, shielding against electromagnetic interference, and protecting against moisture, dust, and other environmental factors. They are essential in manufacturing consumer electronics, automotive electronics, telecommunications equipment, medical devices, and more.

Highlight

• Surface mounting dominates the application segment   
• Asia-Pacific is estimated to be the largest shareholder in the market

Market Dynamics

Global Market Drivers

High Use in Consumer Electronics

The rising demand for consumer electronics is a pivotal driver of the electronic adhesives market. The proliferation of smartphones, tablets, laptops, and wearable devices necessitates advanced adhesive solutions for compact and intricate assemblies. For example, the global smartphone shipment reached 1.17 billion units by 2023, underscoring the sheer volume of production requiring reliable adhesives. These adhesives are essential for ensuring the durability and functionality of electronic components, which must withstand various operational stresses. Moreover, the trend towards miniaturization in electronics increases the complexity of assemblies, further boosting the demand for high-performance adhesives. This surge in consumer electronics propels the need for innovative adhesive materials and drives continuous advancements in adhesive technology to meet the evolving demands of the electronics industry.

Global Market Restraint

Volatility in Raw Material Prices

The electronic adhesives market faces significant challenges owing to the volatility in raw material prices, which directly affects production costs and profit margins. Key raw materials such as epoxy resins, silicones, and polyurethanes are primarily derived from petrochemicals, making their prices highly sensitive to fluctuations in crude oil markets. For instance, in 2021, epoxy resin prices surged by approximately 60% due to supply chain disruptions and increased crude oil costs. This unpredictability complicates budgeting and pricing strategies for manufacturers, potentially leading to increased costs for end-users and reduced market competitiveness. As a result, companies are focusing on developing alternative raw materials and improving supply chain resilience to mitigate these risks.

Global Electronic Adhesives Market Opportunities

Growing Demand from Automotive Sector

The advancements in automotive electronics present significant opportunities for the electronic adhesives market growth, particularly with the surge of electric vehicles (EVs) and autonomous driving technologies. These innovations necessitate high-performance adhesives to secure electronic components, manage thermal stress, and ensure reliability under diverse conditions. The global EV market, projected to grow at a CAGR of 41.6 % from 2020 to 2027, exemplifies this trend.

Electronic adhesives are crucial in battery management systems, power electronics, and advanced driver-assistance systems (ADAS),  which are integral to modern vehicles. As automotive electronics become more sophisticated, the demand for adhesives that can provide robust bonding, effective heat dissipation, and protection against environmental factors is escalating, driving the market forward. This trend underscores the pivotal role of electronic adhesives in the evolving automotive landscape.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global electronic adhesives market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific is the most significant global electronic adhesives market shareholder and is expected to expand substantially during the forecast period. The Asia-Pacific region is dominant in the global market, driven by its robust electronics manufacturing industry and dynamic economic landscape. This region accounts for the largest revenue share, attributed to the high concentration of consumer electronics manufacturers, extensive semiconductor production, and the burgeoning automotive industry.

China's electronic adhesives market is primarily driven by its vast electronics manufacturing sector and favorable government policies. The Chinese government's initiatives, such as the "Made in China 2025" plan, aim to enhance manufacturing capabilities and technological advancements, thereby boosting the demand for high-performance electronic adhesives. Moreover, with companies like Huawei and Xiaomi, the country's leadership in smartphone and consumer electronics production drives substantial market demand.

India's electronic adhesives market is emerging as promising with its growing electronics manufacturing sector, driven by government initiatives like "Make in India." The influx of foreign direct investment (FDI) and the establishment of new manufacturing hubs are expected to augment market growth further. Moreover, the Indian government has sanctioned a program to position India as an ideal location for manufacturing, specifically targeting the production of innovative EVs. The strategy aims to encourage investments in the electric vehicle industry by well-established global manufacturers of EVs. This is estimated to enhance the need for electronic adhesives in battery management systems used in EVs.

Thus, the factors above are estimated to boost the Asia-Pacific electronic adhesives market.

The North American electronic adhesives market is poised for significant growth, driven by technological advancements and substantial demand across various sectors. This region is a hub for innovation and high-tech industries, particularly in the United States and Canada. Furthermore, North America's strong emphasis on R&D and innovation supports the development of new adhesive formulations that offer superior performance.

The United States electronic adhesives market is primarily driven by the robust growth of the consumer electronics sector, with increasing adoption of smart devices, which is a critical factor propelling market demand. According to the Consumer Technology Association, the U.S. consumer electronics industry is projected to reach USD 512 billion in 2024. Additionally, prominent companies such as 3M Company and Dow Inc. are headquartered in the U.S., providing a strong local manufacturing base and continuous innovation in adhesive technologies.

The Canadian electronic adhesives market expansion is largely due to the automotive industry, especially the electric vehicle (EV) sector, which is encouraged by government incentives and growing customer interest in electric vehicles. According to Electric Mobility Canada, the country saw a record number of EV registrations in the first quarter of 2022, there were a record-breaking number of EV registrations, with 26,018 vehicles registered. This indicates a rising demand for related technologies, including electronic adhesives.

Consequently, these factors collectively are estimated to boost the North American electronic adhesives market growth.

Segmental Analysis

The global electronic adhesives market is segmented by resin type, form, application, and end-user industry.

Based on resin type, the global market is segmented into epoxy, silicone, acrylics, polyurethane, and others.

The epoxy segment within the electronic adhesives market holds a significant position due to its exceptional mechanical properties and versatile applications. Epoxy adhesives offer high bond strength, excellent chemical resistance, and superior adhesion to various substrates, making them ideal for various electronic assembly and encapsulation processes. They are extensively utilized in bonding electronic components, sealing circuit boards, potting-sensitive devices, and encapsulating delicate microelectronics.

Moreover, epoxy formulations can be tailored to meet specific performance requirements, such as thermal conductivity, electrical insulation, and flame retardancy, making them suitable for diverse applications across industries like consumer electronics, automotive, aerospace, and telecommunications. The epoxy segment is poised for sustained growth, driven by ongoing advancements in formulation technology and increasing demand for high-performance electronic devices.

Based on form, the global market is divided into liquid, paste, and solid. 

The liquid segment within the electronic adhesives market encompasses a wide range of adhesive formulations that are fluid or viscous in nature. These adhesives offer versatility and ease of application, making them suitable for various bonding, coating, and encapsulation processes in electronics manufacturing. Liquid adhesives provide excellent wetting properties, ensuring uniform coverage and adhesion to complex substrate surfaces, including metals, plastics, and ceramics.

Moreover, they offer adjustable viscosity and curing characteristics, allowing manufacturers to tailor the adhesive properties to specific application requirements. With advancements in formulation technologies, liquid adhesives now exhibit enhanced performance attributes such as high thermal conductivity, low outgassing, and resistance to moisture and chemicals. As a result, the liquid segment continues to witness steady growth, driven by the demand for efficient and reliable bonding solutions in the electronics industry.

Based on application, the global market is bifurcated into conformal coatings, surface mounting, encapsulation, wire tacking, and others. 

The surface mounting segment contributed to the largest market share. The surface mounting segment in the electronic adhesives market plays a pivotal role in modern electronics manufacturing processes. Surface mounting technology (SMT) involves attaching electronic components directly onto a PCB surface instead of through-hole mounting used in traditional assembly methods. Electronic adhesives used in surface mounting applications serve multiple functions, including securing components in place, enhancing electrical conductivity, and providing thermal and mechanical stability.

Surface mounting has become indispensable for achieving compact and lightweight electronic devices, with the miniaturization trend driving the electronics industry. Moreover, the widespread adoption of advanced packaging techniques such as chip-on-board (COB) and system-on-chip (SoC) further amplifies the importance of electronic adhesives in ensuring reliable and efficient surface mounting processes.

Based on the end-user industry, the global market is bifurcated into consumer electronics, commercial aerospace and defense, automotive, telecommunications, medical devices, and others. 

The telecommunication industry is a significant end-user segment for the electronic adhesives market, driven by the rapid expansion of 5G networks and the increasing demand for high-speed internet connectivity. Adhesives are crucial in assembling and protecting various telecommunication equipment, such as antennas, fiber optic cables, and circuit boards. They ensure reliability and durability under harsh environmental conditions and enhance thermal management, which is vital for maintaining the performance and longevity of equipment. The global rollout of 5G technology is expected to boost the demand for advanced adhesive solutions to support the miniaturization and complexity of new telecommunication infrastructure. According to a report by Straits Research, the global 5G infrastructure is projected to exhibit a CAGR of 48.5% from 2022 to 2030, further driving the need for electronic adhesives.

Recent Developments

• January 2024- DELO Industrial Adhesives, a manufacturer of adhesives based in Germany, entered the field of medical electronics applications. The company intends to utilize its proficiency in advanced adhesives, miniaturization, and raw materials to create medical technologies such as glucose monitoring patches, biosensors, and microfluidics. Additionally, the company aims to manufacture new medical-grade adhesives tailored to meet the specific needs and demands of future customers.
• February 2024- Panacol and Hönle UV Technology announced their collaboration to provide comprehensive solutions consisting of versatile adhesives and UV curing equipment, which can be customized for use in the Photovoltaic and flexible electronics industries.

Analyst’s Perspective

As per our research analysts, the electronic adhesives market is on a steady growth trajectory, propelled by technological advancements and increasing applications in diverse industries, particularly consumer electronics. Electronic adhesives are indispensable in the consumer electronics sector, underpinning the functionality, durability, and advancement of modern devices. As the industry evolves, the demand for innovative, high-performance, and sustainable adhesive solutions will continue to rise. Manufacturers that prioritize R&D, material compatibility, and sustainability will be well-positioned to capitalize on the expanding market opportunities presented by the burgeoning consumer electronics industry.