The latest economic figures and electronics market indicators have something for everybody. Those expecting demand to be weak for the rest of the year can find validation in inflated inventories, tepid electronics sales figures in Q2, a concerning U.S. GDP report, and stubbornly high inflation. <\/p>\n\n\n\n
Alternatively, those anticipating a demand rebound can cite encouraging economic news from China, along with soaring design figures that could indicate a return to robust sales growth and more challenging conditions for buyers in the second half. <\/p>\n\n\n\n
From a Supplyframe Commodity IQ perspective, the slow Q2 demand figures largely reflect typical seasonality, with growth expected to return in Q3. The largest global economies are set to skirt recession again in 2024, underpinning a consumer and business demand rise. However, the array of contradictory data reflects uncertainty in the economy and the electronics market, with temperamental macroeconomics and uneven inventory normalization. <\/p>\n\n\n\n
As a result, Supplyframe is advising buyers to keep a close eye on market developments and be prepared for unexpected twists as 2025 looms near. <\/p>\n\n\n\n
According to the Semiconductor Industry Association, following an 8.2% decline in 2024, global semiconductor sales will grow by 13.1% in 2024, a 21.3 percentage point swing to the positive. <\/p>\n\n\n\n
The asymmetrical recovery in end markets drives demand and, ultimately, sales. An AI-driven replacement cycle is expected to help generate low-single-digit percentage growth in smartphone (which represents over 30% of the total semiconductor market by revenue) and PC shipments, marking a sharp contrast with the declines seen in 2023. <\/p>\n\n\n\n
Moreover, server shipments are expected to attain moderate growth this year after a mid-single-digit decline in 2023 as AI systems become increasingly prevalent. These AI-based devices use more advanced chips, such as accelerator chips and high-speed memory, driving up their semiconductor content and value compared to previous-generation products. <\/p>\n\n\n\n
After experiencing a marked slowdown in growth in 2023, with just a mid-single-digit rise in semiconductor revenue, the automotive market is projected to attain a similarly muted level of expansion in 2024 as EV sales growth decelerates. <\/p>\n\n\n\n
Finally, inventories have moved beyond their peak levels, with the Supplyframe Commodity IQ Inventory Index for all electronic components averaging well below the pre-pandemic index baseline, reflecting significant inventory contractions. Despite lingering inflated inventories at distributors and passive and interconnect stocks normalizing ahead of those of semiconductors, the reduction in stockpiles across the supply chain is compelling buyers to procure at lower prices. <\/p>\n\n\n\n
The resumption of growth will bring various challenges for buyers, from rising prices to reduced availability. The increasing demand and lower inventories will extend lead times and, in some instances, shortages beyond SiC transistors and high-bandwidth memory. Passive devices, including specific values and case sizes of resistors and capacitors, will see supply constraints moving forward. <\/p>\n\n\n\n
Buyers are building safety stocks and considering supply base diversification for critical path components. They are increasingly employing Commodity IQ demand, price, lead time, and inventory index forecasts to help answer questions such as, \u201cWe have \u20ac1.5 million for assurance of supply during this period; what commodities and sub-commodities should our supply chain teams focus on?\u201d<\/p>","protected":false},"excerpt":{"rendered":"
The latest economic figures and electronics market indicators have something for everybody. Those expecting demand to be weak for the rest of the year can find validation in inflated inventories, tepid electronics sales figures in Q2, a concerning U.S. GDP report, and stubbornly high inflation. Alternatively, those anticipating a demand rebound can cite encouraging economic […]<\/p>","protected":false},"author":37,"featured_media":6983,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[220,11,102],"tags":[184,47,288,70],"class_list":["post-6982","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commodity-iq","category-featured","category-resources","tag-commodity-iq","tag-industry-news","tag-iq-insider","tag-semiconductors"],"blocksy_meta":[],"yoast_head":"\n