Electronic Components Experience Shortened Lead Times, Stabilized Prices, Lower Demand

Less than half of all electronic component pricing dimensions for direct commodities in the third quarter will increase, down from 74% in the second quarter.

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New Supplyframe data shows an electronics supply chain that is in transition, with uneven changes for end markets and components. But while electronic component availability is improving and prices are stabilizing across many categories, Supplyframe Commodity IQ indicates global supply chain issues, extended lead times, geopolitical uncertainty and elevated logistics and labor costs will remain problematic for the electronics ecosystem and specific end markets into the first half of 2023.

“The electronic component supply chain is improving, but slowly and unevenly,” says Supplyframe CEO and founder Steve Flagg. “The multi-tier electronics supply chain exists within a complicated and volatile environment in which ever-evolving, unforeseen events continue to impact capacity, costs, lead times, and other considerations. Constraints and shortages are not over. And a rebalancing of inventories and component market corrections is in play.”

From BusinessWire:

  • Decreasing lead times are a bright spot. Supplyframe forecasts 52% of all electronic component lead time dimensions to decline or stabilize in the third quarter. That’s a significant improvement from the second quarter, when 80% of lead times rose.
  • Less than half of all electronic component pricing dimensions for direct commodities in the third quarter will increase, down from 74% in the second quarter.
  • Softening consumer demand, particularly in China, and economic concerns are the main culprits, with quarter-on-quarter sourcing actions contracting by 7% and by 11% from May to June. 
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