Copper pricing exceeded $10,000 per metric ton the last of April and has climbed even higher through mid-May on fears of short supply and as Chinese smelters cut production. In a recent Commodity IQ snap poll, all respondents indicated that they review copper pricing at least quarterly to gauge impacts on connector pricing. While the Commodity IQ Price Index for connectors dropped by 1% compounded annually through April, sequentially in Q1, the index inflated by 34%.
Recent Posts
|
Uncertain global macroeconomics and the timing of excess inventory depletion remain critical impediments to projecting supply chain dimensions. It is not completely clear when in H2 sustained growth will emerge and accelerate. |
In-market observations indicate that passive supply challenges stemming from the New Year's Day seismic event endure. Murata, Toshiba, and other passive device manufacturers with production facilities in Japan are bolstering Vishay's position in the market. For passives, the Commodity IQ Index rose nearly 4% month-over-month for March.
|
Demand for power ICs dropped below the index baseline (indicating contraction) in Q4 2023 for the first time in 17 consecutive quarters. As with discrete ICs, analog ICs (including power analog) are a facsimile of the total semiconductor market, and sourcing activities for analog power devices were down 44.4% year-on-year in March. Despite the overall softness, rising demand from the automotive and medical sectors and the overall global electrification trend are forecast to increase power IC revenue and help further normalize inventory levels in later H2. |
Gold and silver pricing climbed by 3% and 9%, respectively, last week – suggesting price inflation in Q3. Gold pricing exceeded the Commodity IQ upper forecast band to reach new highs of about $2,300 per troy ounce. The Commodity IQ Price Index for connectors has increased for four of the last five months, rising 5% sequentially in March. With increasing labor rates, H2 demand confidence in multiple markets, and ongoing inventory normalization – pricing will be mostly stable in Q2.
|
Capacitor, resistor, switch, connector, relay, and circuit protection inventories fell month-on-month in March. Resistors experienced a 13% sequential decline and dropped by over 40% in March compared to January. As a result, the Commodity IQ Lead Time Index across all resistors rose 7% in March after rising 21% month-over-month for February. |
Despite a major surge in demand in January, growth in global electronics design activity decelerated compared to December, prompting Supplyframe to trim its Q1 outlook for global component development activity.
As some leading discrete IC manufacturers have and continue to announce end-of-life status for devices, second and third-tier established and new market entrants, particularly from China, should considered as alternative sources. Q1 sourcing actions, as measured by the Commodity IQ Demand Index, are forecast to accelerate by 13.2% for diodes and 14.5% for transistors.
|
Non-automotive and smaller suppliers will face a greater challenge during the next few quarters if the major economies, especially China and Germany, fail to perform as expected. Prices are set to remain stable, yet flexible, for all optoelectronic product types in 2024. To maintain market share, manufacturers will remain hesitant to increase prices significantly, even if they are impacted by raw material costs. |
The Commodity IQ Price Index for converters, power ICs, and signal ICs contracted by 1.2%, 1.3%, and 0.5%, respectively in January. Excess stockpiles linger, with the Commodity IQ Inventory Index for analog power at more than two-and-a-half times the baseline level in November; prices have fallen as suppliers work to clear inventory and compete for market share.