2025: A Transformative Year for AI in Product Development2025: A Transformative Year for AI in Product Development

Artificial intelligence (AI) is deeply embedded in product design and functionality across the electronic components industry.

Jim Beneke, Vice President

January 23, 2025

5 Min Read
AI in electronics design
Nutjaree Yomjun for iStock / Getty Images Plus via Getty Images

At a Glance

  • AI integration is expected to become ubiquitous, touching nearly every aspect of the product lifecycle.
  • Edge AI is gaining traction, enabling real-time data processing and decision-making without relying on cloud connectivity.
  • Increasing demand for power from AI data centers and electric vehicle charging is straining power infrastructures.

Looking ahead, 2025 will be shaped by several significant trends in the electronic components market. Based on industry data, market analyst information, and survey data from the latest Avnet Insights report, here's an overview of some of the key developments to expect.

Pervasive AI integration

Artificial intelligence (AI) is deeply embedded in product design and functionality across the electronic components industry. In 2025, AI integration is expected to become ubiquitous, touching nearly every aspect of the product lifecycle.

In product design, AI tools are streamlining workflows and accelerating time-to-market. Avnet’s recent Insights report shows that engineers are increasingly leveraging AI assistants like ChatGPT, Google Gemini and Microsoft Copilot to answer technical questions during the design and development process. This trend is expected to grow, with AI positively influencing various aspects of product design, from rapid prototyping to AI-driven testing.

Companies are integrating AI into more end products, a trend that is accelerating rapidly. Globally, many engineers say they have already incorporated AI into products currently shipping or are actively working on AI integration for future products. This widespread adoption is driven by the potential of AI to enhance product functionality and user experience.

Related:AI Policy and Governance: Shaping the Future of Artificial Intelligence

Edge AI and smart sensors

Edge AI is gaining significant traction, enabling real-time data processing and decision-making without relying on cloud connectivity. This trend is particularly evident in the development of smart sensors equipped with AI capabilities, enabling more sophisticated data collection and analysis at the device level.

The global intelligent industrial edge computing market is expected to reach $30.75 billion during 2025, with a compound annual growth rate (CAGR) of 18%. Increasing demand for real-time processing and the need to reduce latency in various applications fuels this growth.

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Power management and wide bandgap semiconductors

Power management, conversion and control are becoming increasingly critical across various electronic applications. The surge in power consumption, particularly from emerging technologies like cryptocurrency mining and AI, is driving innovation in power management technologies, with greater efficiency being the primary goal.

Wide bandgap semiconductors, such as Silicon Carbide (SiC) and Gallium Nitride (GaN), are displacing traditional silicon in high-power applications. These materials offer superior efficiency, higher temperature operation and faster switching speeds, making them ideal for power-intensive applications like electric vehicles and data centers.

Related:AI Tackles Greater Frontiers In 2025

Autonomous systems and robotics

The electronic components market is experiencing a significant push toward autonomous systems and advanced robotics. These AI-powered robots are becoming more adaptable, and capable of interacting with humans and executing complex tasks in dynamic environments.

In industrial settings, the adoption of autonomous systems is expanding rapidly, with applications in process automation, manufacturing, logistics, healthcare and retail. The integration of edge computing and 5G networks is enabling faster, more stable and secure connectivity for these autonomous systems.

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Sustainable and energy-efficient components

Environmental concerns are driving the electronic components market toward more sustainable and energy-efficient systems. Engineers are prioritizing power efficiency in their designs, particularly for edge AI and IoT devices. New materials and design techniques are being developed to reduce power consumption without compromising performance.

The industry is also placing greater emphasis on sustainable manufacturing processes and recyclable materials. This trend is driven by both regulatory pressures and consumer demand for more environmentally friendly products.

Related:How to Build Better Applications with Edge AI

Advanced sensing technologies

The development of more sophisticated sensing technologies is opening new possibilities for electronic systems. Multispectral and hyperspectral imaging sensors, capable of capturing data beyond the visible spectrum, particularly at infrared wavelengths, are becoming more common in applications like agriculture and industrial inspection.

Looking further ahead, quantum sensors leveraging principles of quantum mechanics are on the horizon. These sensors could provide unprecedented levels of precision in measurement, potentially revolutionizing fields like agriculture by enabling early detection of drought or nutrient deficiencies.

Security and privacy concerns

As electronic systems become more interconnected and data-driven, security and privacy are paramount concerns. Engineers cite security and privacy as the top challenge when integrating AI into product designs. There's an increasing focus on developing secure-by-design components and systems to protect against cyber threats.

The industry is also grappling with the ethical implications of AI integration, emphasizing the development of ethical AI systems that protect user privacy and prevent misuse of data.

Power infrastructure challenges

The increasing demand for power from AI data centers and electric vehicle charging is putting strain on existing power infrastructures. By 2026, AI's power demands are projected to skyrocket 75% annually, potentially consuming as much energy as all of Spain in 2022.

This surge in demand is driving innovations in power distribution, including the adoption of high-voltage DC (HVDC) transmission to reduce losses over long distances. Electronic component manufacturers will need to develop components and sub-assemblies that can operate efficiently within these evolving power infrastructures.

The electronic components market in 2025 will be characterized by the deep integration of AI, advancements in power management and sensing technologies, a push toward autonomous systems, and a focus on sustainability and security. These trends are driving innovation across the industry, from the design process to end-user applications, shaping a future where electronic components are smarter, more efficient and more secure than ever.

As the market evolves, engineers and companies must be adaptable, continuously updating their skills and knowledge to keep pace with these rapid advancements. The successful players in this market will be those who can effectively leverage these trends to create more intelligent, efficient and secure electronic systems that meet the growing demands of our increasingly connected and power-hungry world.

About the Author

Jim Beneke

Vice President, Tria Americas

Jim Beneke is vice president of Tria Americas, which is a new brand for embedded compute boards, systems and associated design and manufacturing services at Avnet. He has more than 39 years of experience in technology management, business and strategy development, technical marketing, research and development and design engineering.

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