Commodity IQ Lead Time Index Dips to Four-Year Low

Learn More About Commodity IQ

In another sign of buyers’ domination of the electronics supply chain, the Commodity IQ Lead Time Index for all components tracked by Supplyframe declined to its lowest level in four years, reflecting reduced delivery lags and improved availability.

The index totaled 89.4 in November, marking the lowest reading since November 2019. The lead time index has remained below the baseline level of 100 for three consecutive months, showing a sustained trend of reduced delivery delays for components.

Declining Lead Times Meet Inventory Normalization

From the start of September through the end of November, the lead time index declined 12% compared to the prior three months. This decrease was broad-based, with all but four of the 36 component categories tracked by Supplyframe experiencing declines.

Transistors showed the sharpest drop, with a 39% sequential decline in the lead time index for the three-month period. In terms of contracted transistors, nearly half of all at-volume general-purpose parts for Q4 had lead times of 25 weeks or less in Q4, compared to just 9% in Q4 2022.

The lead time reduction is accompanying a normalization in inventory conditions across the supply chain. Following the electronics industry’s extended stockpile correction, the Commodity IQ Inventory Index for all components is now rising toward the baseline level, indicating that inventories could soon rise. This rise is leading to improved availability for buyers.

It’s a Buyer’s Market

The lead time drop presents more confirmation that the balance of power in the electronics supply chain favors the buy side. Buyers should leverage their position and challenge suppliers’ lead times to ensure they are securing the shortest possible delivery, as inventories fell month-over-month in November by 2.1% across all electronic components and most passive and IC commodities experienced declining inventories.

Elevate Your Intelligence

Download a sample commodity summary and see how Commodity IQ delivers the optimum balance of human and machine intelligence for the electronics supply chain.

Explore Supplyframe Solutions

2021

Commodity IQ

Drive your procurement strategy with predictive commodity forecasts.
IQ Insider Background

IQ Insider

Join IQ Insider to receive weekly, curated insights powered by Commodity IQ.

IQ Insider Bottom Banner (1)

Commodity IQ Calculator

Compare your last six months of component costs to market and contracted pricing.