Semiconductor buyers should monitor the pricing of the key metal regularly as potential IC price upticks could appear as a result. Produced in small qualities, almost entirely in China, gallium pricing rose by nearly 20% in early July to about $325 per kilogram as China declared the requirement for export permits before settling back to nearly $245 per kilogram in the first weeks of August.

Although most electronic component categories emerged from the severe shortage of 2021-2022 months ago, many parts used by the automotive sector have remained scarce throughout this year. However, the latest earnings announcements from leading automakers revealed that the semiconductor supply situation has cleared up significantly.

Transpacific capacity reductions in the form of blank (canceled) sailings and even slow steaming are emerging, as carriers manage overcapacity in an effort to stabilize rates. According to the Drewry, average spot rates from Shanghai to Los Angeles per 40-foot equivalent container (FEU) the first week of August were 20% from 2018 and 24% higher than 2019. 

The share of at-volume resistor lead times in the 0-to-12-week band nearly doubled in Q3, signaling readily-available products, save some automotive-grade devices. As consumer and mobile application demand softness endures, so does depressed pricing, with evidence that some manufacturers are willing to negotiate prices directly.

As the global metals supply chain continues rigorously managing and reducing inventory, Asian metal makers seek more volume commitments in H2 and 2024 by offering attractive pricing. Given sideways trending for tin, aluminum, copper, and most other raw metals – electronics commodity and procurement teams would do well to track spot pricing for sourcing activities. Uncertainty breeds caution as copper pricing has been moving laterally but in July was 12.3% higher on average than 2022.

Signs that the client-side PC market is improving have become more apparent as bellwethers Intel and AMD reported their most recent earnings. For the Intel Client Computing Group, revenues, while down 12% year-on-year in its Q2, grew by 17% quarter-on-quarter. AMD client net revenues surged 35% from its Q1 to Q2 while the segment operating loss narrowed. Though MPUs may be cannibalized by GPUs as AI demand takes hold, a bottom for the PC market could spell pricing challenges ahead in H1 2024.

Booming sales of AI servers are fueling a recovery in the memory market, with signs appearing of increased prices and the potential of reduced availability for high-end DRAM parts. SK Hynix became the latest semiconductor supplier to signal the start of recovery for the memory industry, driven by the demand for high-performance memory required for large-scale AI processing in data centers.