Uncertain global macroeconomics and the timing of excess inventory depletion remain critical impediments to projecting supply chain dimensions.<\/p>\n\n\n\n
Automotive demand slowdowns are mildly improving auto-grade part lead times. Yet, in-market evidence exists of buffer inventory acquisition for ICs and passive components in the sector, including commercial-grade components, placing availability pressure particularly on MCUs. <\/p>\n\n\n\n
Demand activities for all components spiked by 18% from February to March after falling below the Commodity IQ Demand Index in November 2023 and remained in contraction territory until February. <\/p>\n\n\n\n
Regardless of increases in the March index and as confirmed by alignment with components supplier and EMS provider feedback \u2013\u00a0it is not completely clear when in H2 sustained growth will emerge and accelerate. <\/p>\n\n\n\n
While pricing overall is viewed as declining or flexible for high-volume and LTA-based orders, the Commodity IQ Price Index rose by 6.7% sequentially in March and has been at twice the pre-pandemic baseline since December 2023. Some component manufacturers are sensing a somewhat delayed demand recovery and are still providing some price flexibility but seeking increases wherever possible to counter margin and revenue losses.<\/p>\n\n\n\n
Distributors continue offering pricing concessions to reduce excess inventories but decreases remain selective. Pricing generally remains high at two times the index baseline through Q3. Distribution and supplier-direct prices will continue to firm and rise into Q2 for specific components.<\/p>\n\n\n\n
Electronic component inventories remain elevated through Q2, though interconnect and passive inventories are normalizing faster than semiconductor inventories. <\/p>\n\n\n\n
Over twice the number of semiconductor commodities analyzed by Commodity IQ were above the index baseline for March versus the interconnect and passive commodities. On average, for Q1, semiconductors were 1.6 times the Commodity IQ Inventory Index baseline, and, taken together, interconnect and passive values were only slightly above the baseline.<\/p>\n\n\n\n
Inventories mostly peaked in late Q2; however, slower-than-anticipated normalization translates into a healthy supply environment, with channel inventories still expanding but at a slower pace. <\/p>\n\n\n\n
Lead times across all electronic components across the Supplyframe DSI network for March were just 5% above the Commodity IQ Lead Time Index 2020 baseline \u2013 for interconnects and passives, lead times are approaching the bottom, with about a third of these commodities having inflated sequentially for the last four months.<\/p>\n\n\n\n
Nearly 85% of contracted at-volume semiconductor lead times for Q2 are 25 weeks or less. Notwithstanding continuing lead time declines for many IC commodities, over a quarter of these commodities through March have remained at well over two times the Commodity IQ Lead Time Index since October 2023.<\/p>\n\n\n\n
Buyer negotiations based on lower lead time and still-excessive inventories before potential demand-based price increases for many of your BoM parts in H2 will endure into H2, as will a focus on long-term supply assurance for resistors, small case-size capacitors (as demand returns in earnest), and MCUs.\u00a0<\/p>","protected":false},"excerpt":{"rendered":"
Uncertain global macroeconomics and the timing of excess inventory depletion remain critical impediments to projecting supply chain dimensions. Automotive demand slowdowns are mildly improving auto-grade part lead times. Yet, in-market evidence exists of buffer inventory acquisition for ICs and passive components in the sector, including commercial-grade components, placing availability pressure particularly on MCUs. Demand activities […]<\/p>","protected":false},"author":37,"featured_media":6966,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[220,11,102,1],"tags":[184,129,288,77],"class_list":["post-6965","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commodity-iq","category-featured","category-resources","category-uncategorised","tag-commodity-iq","tag-industry-trends","tag-iq-insider","tag-supply-chain"],"blocksy_meta":[],"yoast_head":"\n