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The Commodity IQ Price Index for memory surged again in May, as booming demand and constrained supply of artificial intelligence (AI) memory chips boosted the reading to a four-and-a-half-year high |
High-capacitance ceramic capacitors will see ASPs inflate as AI-enabled laptops and servers are based on entering mass production in H2. MLCCs represent more than two-thirds of the total part count on servers. For capacitors overall, the Commodity IQ Inventory Index for the first six months of the year was 44% lower on average than the prior six-month period, and the price index rose 15% by the same measures. The Commodity IQ Price Index for June reached its highest value since Q4 of 2019.
Global resistor demand in 2024 was off by 4% year-on-year through the first six months, yet it rose by nearly 5% compared to the previous six months. The Commodity IQ Price Index for resistors inflated by 11% in June compared to the January reading but remains less than half of the pre-pandemic levels in 2019.
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The Commodity IQ Design Index and the Commodity IQ Demand Index are forecast to decline quarter-over-quarter through Q3 by 5% and 8%, respectively. While decreases in the sourcing activities indicate falling demand, nearly 80% of electronic component commodities are projected to ebb by less than 5%, and over 40% will remain above the index baseline, signifying growth but at a slower rate. The component design picture in Q3 will show a different landscape, with 65% of commodities weakening by 5% or more. There may yet be some opportunities for cost-downs. |
While all regions experienced less sourcing action in June, some countries fared better than others in the last six months as measured by their compounded monthly growth rate (CMGR) over the same period, including increases of 3% in the United States, 4 in Germany, and 7% in Singapore. In these countries over the same period, demand expanded for both interconnects and passives by 5%, optoelectronics by 3%, and circuit protection devices by 4%. No electronic component commodities in any region (Americas, APAC, and EMEA) had a declining CMGR for the past six months of more than 3%.
During the past two years, the enormous buildup of excess inventory has been prevalent in the electronics component market. However, the latest signs from the Commodity IQ Inventory Index and the marketplace reveal that the inventory dragon may have been unequivocally slain
The Commodity IQ Price Index for MPUs and MCUs will remain above the index baseline, indicating rising prices, into H1 2025. High-end MPU and automotive microcontroller upward pricing will persist as makers attempt to preserve profit margins and defocus on legacy devices. Additionally, compute upgrade cycles are showing signs of life into H2 2024, and 8—and 16-bit MCU production will stagnate as automakers and other customers transition to 32-bit MCUs, leading to supply constraints and price pressure.
Engineering activities for connectors remain robust. The Commodity IQ Design Index for connectors in Q2 will be down 6% sequentially but still over one and half times above the index baseline, suggesting demand growth will reemerge in the second half.
The Commodity IQ Demand Index for transistors declined by 10% sequentially in April and 5% in May, falling 20% below the index baseline, indicating weakening sales. Yet inventories contracted sequentially in four of the last six months, causing the Commodity IQ Lead Time Index to expand in four of those same six months, while the price index grew on average by 7% in the same timeframe.