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The Industry News and Analysis You Need to Know
Ambiguity Abounds for Electronic Component Supply Chain Dimensions
Uncertain global macroeconomics and the timing of excess inventory depletion remain critical impediments to projecting supply chain dimensions. It is not completely clear when in H2 sustained growth will emerge and accelerate.
Passive Makers Still Impacted by Recent Earthquake
In-market observations indicate that passive supply challenges stemming from the New Year's Day seismic event endure. Murata, Toshiba, and other passive device manufacturers with production facilities in Japan are bolstering Vishay's position in the market. For passives, the Commodity IQ Index rose nearly 4% month-over-month for March.
Power Circuit Demand Will Continue to Ebb in Q2
Demand for power ICs dropped below the index baseline (indicating contraction) in Q4 2023 for the first time in 17 consecutive quarters. As with discrete ICs, analog ICs (including power analog) are a facsimile of the total semiconductor market, and sourcing activities for analog power devices were down 44.4% year-on-year in March. Despite the overall softness, rising demand from the automotive and medical sectors and the overall global electrification trend are forecast to increase power IC revenue and help further normalize inventory levels in later H2.
Connector Pricing Likely to Increase on Precious Metal Surges
Gold and silver pricing climbed by 3% and 9%, respectively, last week – suggesting price inflation in Q3. Gold pricing exceeded the Commodity IQ upper forecast band to reach new highs of about $2,300 per troy ounce. The Commodity IQ Price Index for connectors has increased for four of the last five months, rising 5% sequentially in March. With increasing labor rates, H2 demand confidence in multiple markets, and ongoing inventory normalization – pricing will be mostly stable in Q2.
Inventories Decline for Many Interconnects and Passives
Capacitor, resistor, switch, connector, relay, and circuit protection inventories fell month-on-month in March. Resistors experienced a 13% sequential decline and dropped by over 40% in March compared to January. As a result, the Commodity IQ Lead Time Index across all resistors rose 7% in March after rising 21% month-over-month for February.
Component Design Activity Growth Decelerates in January
Despite a major surge in demand in January, growth in global electronics design activity decelerated compared to December, prompting Supplyframe to trim its Q1 outlook for global component development activity.
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