Server makers were reporting tight supplies of AI GPUs in April. Prices are now climbing for some GPUs, with NVIDIA hiking the cost of its AI GPUs for the Chinese market to as much as $36,500. Demand for greater AI acceleration capabilities at the edge (including PCs) will rise in 2024. Buyers need to adjust to a reality where AI acceleration is increasingly necessary, but chips could be expensive and in short supply.

Active and passive component manufacturers are trimming product portfolios of mature devices, focusing instead on newer technologies and pivoting to more stable markets like automotive and new energy. End-of-life notifications are on the rise, qualifying second and third-tier suppliers is strongly recommended for legacy components, as well as newer suppliers such as SGMICRO for standard logic and analog ICs.

The good news for buyers is lithium carbonate spot pricing slumped by 70% between November and April, and Chinese cobalt prices from China declined by 22.5% from January 1 to mid-April. The bad news is natural flake graphite supply, an often-overlooked battery material, is heavily constrained. By 2030, it is estimated to have a supply deficit of over 1 million metric tons.

While non-automotive purchasers should not expect significant price flexibility, price increases should not be accepted on lower demand. Taken together, MCU and MPU prices declined 4% through Q1, falling 7% between February and March.

In a complete reversal from 2022 and earlier this year, a full 50% of at-volume lead times are now quoted at 12 weeks or less. Those at over 52-week lead times have plummeted from 54% at the start of 2023 to just 4% currently.

Purchasers of temperature sensors, high frequency connectors, or special use electrodes should take note of platinum shortages. There will be a projected deficit of 556,000 troy ounces of platinum for 2023, which will impact the aforementioned components.

Amplifier circuit pricing was up 57% year-on-year in May and remains over one and half times the Commodity IQ Price Index baseline thus far this year. Pricing is trending up for certain operational amplifiers, with some distributors increasing prices by 15% or more.

Artificial Intelligence (AI) promises to boost the efficiency of shipping logistics, as well as demand for AI chips like graphics processing units (GPUs). The trucking industry is now contending with a paucity of workers, with an 80,000-driver shortfall that is expected to double by 2030, according to the American Trucking Association (ATA). However, another solution exists to address this challenge.

Power circuit demand was down year-on-year in April and in Q1 by 25% and 15%, respectively. Leading suppliers like Texas Instruments are quoting a reduced 8-to-10-week lead time for more than 75% of its power IC portfolio, a marked decrease from prior quotes.

Macroeconomic shifts will have massive repercussions for the global electronics supply chain, with a demand rebound for PCs, smartphones, and data centers required to drive new growth. The Supplyframe forecast for a markedly more balanced electronics supply chain in H2 persists as component inventories are largely digested into Q3.