CLEVELAND--U.S. demand for passive electronic components will increase nearly 4 percent annually during the next 4 years.

According to a study by The Freedonia Group, U.S. manufacturers will spend $21.4 billion on connectors, capacitors, resistors and other passive components in 2005. The sales increases can be attributed to advances in wireless and fiber optic communications, as well as an improved outlook for the defense and aerospace industries. The growing number of electronic devices in motor vehicles will also benefit sales of passive components.

A passive component does not affect the electrical signals or data that pass through it. In contrast, an active component adds intelligence in some manner to the signals or data that pass through it. For example, in networking, an active hub regenerates fading input pulses into new, strong output pulses. A passive hub is just a junction box that does not affect the passing data.

Connectors represent the largest segment of the passive components industry, accounting for more than 35 percent of total sales last year. Although sales growth for connectors will be below average during the next few years, these components will remain the largest segment of the industry.

The strongest sales growth will be for microwave components and inductance devices. Both of these products will benefit from continued strength in wireless communications and increased defense spending.

U.S. manufacturers of passive components will face increasingly competitive international markets. However, capacity increases in the 1990s have allowed these companies to remain price-competitive in the world market. The United States is a large net exporter of parts used to manufacture several types of passive devices, particularly capacitors and inductance devices.

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