Electronic Component Demand Starts Strong in 2024

John Ward Author

Following a one-month dip in December, global electronics sourcing activity rebounded robustly in January, with the Commodity IQ Demand Index showing that sales were on the verge of rising.

The Commodity IQ Demand Index rose to 99.3 in January, up 27% from 78.2 in December. This increase represented the index’s highest-ever month-to-month growth rate based on historical data extending back to May 2022. With the index near the baseline level of 100, the latest reading shows that demand has approached the break-even point.

EMEA Leads in Worldwide Growth

The Europe, Middle East and Africa (EMEA) region posted the largest growth margin worldwide, with the demand index increasing by a whopping 45% from December to January. The Americas region posted the second-highest growth, with a 36% sequential increase.

Asia Pacific (APAC) experienced less vigorous growth of 17%. However, the APAC demand index rose above the baseline to reach 102.9 in January, up from 87.6 in December, indicating that demand for electronics is expanding in the region.

Of the major commodity groups tracked by Commodity IQ, only one declined from December to January: transformers. Over 30 electronic component commodity groups experienced double-digit growth on a worldwide basis, illustrating the breadth and depth of the January surge.

Predictions Point to Semiconductor Growth in 2024

A number of categories are now in positive demand territory, including widely used devices like transistors, resistors and diodes.

The rise comes during what is typically a slow month for electronic sales, following the peak electronics season in Q3 and Q4. However, optimistic signs are appearing in the market, with the ECIA reporting that its survey of sentiment among electronic components supply chain participants jumped by 20 points sequentially in January. The ECIA survey index rose to 98, nearing the baseline level.

Market watchers predict the global electronics and semiconductor markets will return to growth in 2024, following a dismal performance in 2023. Although one month doesn’t signify a trend, the strong results in January serve as an early sign that demand may already be recovering.

With a change in the demand conditions, buyers need to monitor their supply situations as procurement conditions may become more challenging as 2024 progresses.

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