Demand for non-ferrous metals will rise into H1 2024 as EVs (despite recent demand trends) and renewable energy applications drive growth. Copper spot pricing is up nearly 7% month-on-month through the third week of November. While pricing and demand for crucial precious metals have been declining since May, spot prices have shown increases since October, following the Hamas attack on Israel. Gold spot pricing climbed by 8% through October, while silver has struggled to achieve significant upward price momentum. For electronic component buyers, it is important to understand the contracted pricing of metal input costs to component manufacturers, with most of 2024 perhaps already negotiated.

The South Korean Ministry of Trade, Industry, and Energy, alongside the Ministry of Science and ICT, reported that its ICT (information and communications technology) exports surpassed imports for the first time in almost a year and a half. With memory ICs being an essential portion of the country's ICT exports, the October upswing represents a reversal in memory demand—the Commodity IQ H1 2024 forecast for high-end memory points to continued price increases and some availability constraints as a result. 

Sodium-ion (Na-ion) batteries have twice the energy density of their lithium-ion (Li-ion) counterparts. Still, with the space limitations in consumer electronics, Li-ion chemistries remain a better option. Additionally, Li-ion batteries have two to five times as many charging cycles and can tolerate the broader range of temperatures that, for example, smartphones demand. So, while Li-ion batteries are about a third more costly than Na-ion batteries – the benefits outweigh the additional cost. This scenario translates into the need for end-market battery buyers to continuously consider raw material costs for Li-ion batteries, particularly cobalt and lithium.

Evidenced by market reports of currently constrained CY9-series 32-bit MCUs and S29-series NOR flash from Infineon now impacting customer production timelines and indications of specific 16-bit Renesas MCU orders being canceled by the company – lead times and pricing are not necessarily in the buyer's favor for all electronic components. Indeed, the Commodity IQ Lead Time Index across all memory technologies increased month-on-month in October by 2.4%. For microcontrollers, pricing was rising in November, according to the Commodity IQ Price Index. 

High Bandwidth Memory (HBM) is the hottest product in the memory market today, with booming demand for the fast-performing DRAM helping to propel the industry’s recovery in Q4. However, HBM is also in a severe shortage, as leading memory suppliers Samsung and Micron continue to ramp up production to catch up with top HBM maker SK Hynix. As the memory makers rush to increase output, they are turning to semiconductor equipment suppliers to provide the advanced chipmaking and packaging capabilities required for HBM manufacturing.

Commodity pricing through Q4 2023 favors the buy-side, with nearly three-quarters of electronic component price dimensions either declining (48%) or stabilizing. The forecast for H1 2024 pricing shows just 4% of price dimensions on the rise and 72% in stable mode. The main price and availability outlier for Q4 2023 and 2024 is memory – specifically, NAND flash and DDR4, DDR5, and HBM (high-bandwidth memory) DRAM. Buyers should acknowledge and plan to increase memory pricing while ensuring the most advantageous price and delivery terms for most active and passive components, at least through H1 2024.

Ocean freight shippers are and have negotiated current and due-to-expire long-term agreements as spot rates remain significantly lower than long-term rates. Both spot and contract air cargo rates continue to fall from the highs of 2022, general cargo rates down globally by nearly 40% year-on-year through the first eight months of 2023, yet special rates (including high-tech) rose by 7%, according to WorldACD. Buyer's should move to secure long-term agreements before air rates likely rise in 2024, while noting that ocean freight rates – driven down by massive excess capacity this year – may artifically be inflated as lines employ blank sailings, schedule adjustments, ans slow steaming to constrain supply.

The EMS leader, Foxconn, restated its fiscal Q4 2023 sequential growth forecast, its peak season for the information and communications technology (ICT) sector, on its earnings call last week. Company guidance for parts of the ICT segment (particularly consumer electronics and smartphones) was "neutral" for 2024, with its primary growth driven by servers, especially cloud services and AI servers. This further bolsters the Commodity IQ guidance for consideration of persistent memory and solid-state storage price inflation through next year.

Global sales of electronic components continued to rise in October despite declines in the memory and passive segment, according to the latest reading of the Commodity IQ Demand Index. The index in October stood at 100.4, just slightly above the baseline level of 100, indicating a marginal rise in demand. However, the index has declined recently, reflecting a deceleration in the sales growth rate.