Nearly 90 percent of manufacturers are facing IoT obsolescence challenges every year, according to new research by UK-based electronics consultancy ByteSnap Design. Around 25 percent of manufacturers are facing the problem every quarter.

The research also finds that manufacturers are struggling to combine AI with IoT due to equipment and infrastructure not being future-ready.

The report, Futureproofing Manufacturing: Tackling Obsolescence & Electronics Challenges in Industrial Manufacturing draws on feedback from 593 manufacturing professionals. It finds that embedded and connected systems are central to industrial operations. But most manufacturers lack the tools, expertise, and strategies to handle the risks that come with electronics obsolescence.

The research also shows that 88 percent of manufacturers require specialist support to manage obsolescence, and 81 percent struggle to find reliable partners with the necessary capabilities. The report argues that this is a critical gap that threatens long-term IoT performance and system resilience.

“Industrial IoT has transformed how manufacturers operate, but it’s also introduced new dependencies on embedded hardware and connected electronics,” said Dunstan Power, Director at ByteSnap Design and author of the report. “When a key component becomes obsolete, it can affect not just one product, but an entire connected ecosystem. Manufacturers urgently need to think beyond short-term fixes and adopt lifecycle strategies that match the complexity of today’s industrial technologies.”

The report finds that obsolescence is a regular challenge, not a rare event. 88 percent of manufacturers face issues with component or system obsolescence at least once a year, and over a quarter experience it every quarter. When it hits, the cost of redesigns — particularly in complex IoT systems — can exceed £250,000.

The report argues that being proactive pays off. It shows that manufacturers who actively plan for obsolescence can reduce related costs by up to 80 percent. This includes steps like monitoring component lifecycles and designing in flexibility from the start. This is crucial the report argues when devices are expected to stay in the field for years.

According to the report, 89 percent of manufacturers see AI as key to staying competitive, especially when it’s used alongside IoT for predictive maintenance, diagnostics, and smarter system monitoring. But the benefits can be quickly lost when hardware can’t keep up.

Cost remains a big barrier to tech adoption, according to the research. Despite awareness of the benefits, 61 percent of manufacturers told the researchers that tight budgets make it hard to upgrade ageing systems or invest in new technologies like IoT and automation — even when those investments could reduce disruption in the long run.

The researchers found there is a strong appetite for upskilling in embedded and connected systems. 72 percent of respondents said they want training focused on areas like advanced electronics, IoT integration, and obsolescence management. The situation is being exacerbated by experienced engineers retiring and newer systems getting more complex.