The Commodity IQ Demand Index for all components tracked by Supplyframe fell to its lowest level for the entire year in June, reflecting the slow pace of end-market demand outside of the AI and a select few other applications.
The capacity crunch will worsen through H2 and well into H1 2025. Across all memory ICs, the Commodity IQ Lead Time Index has remained at twice the 2022 baseline for nine consecutive months. Leading maker Samsung plans to increase pricing for its entire memory portfolio by as much as 15%, with server components undergoing the most significant increases. DDR5 is experiencing larger price hikes than over inventoried DDR4. Contract DRAM pricing is expected to increase by an average of 10% in Q3 for server and PC variants.
According to the Commodity IQ Lead Time Index, excluding memory, 61% of all semiconductor lead time dimensions are characterized as Stable/Some Constraints and 30% as Declining/No Constraints for H2.
Regional component design-in cycles are robust, with the Americas, Asia-Pacific, and EMEA all well above their respective 2020, 2021, and 2022 medians – further making the case for forthcoming demand as AI demand is now the new EV and PC/server upgrade cycles start to take hold, and smartphone demand is showing signs of life. However, the array of contradictory data reflects uncertainty in the economy and the electronics market, with temperamental macroeconomics and uneven inventory normalization. As a result, Supplyframe is advising buyers to keep a close eye on market developments and be prepared for unexpected twists as 2025 looms near.
Sourcing activities have been relatively stable for the past 11 months, signaling that demand has likely bottomed at a level below both the Commodity IQ Demand Index baseline and the 2023 median. Though delayed, the industry's supply side largely anticipated meaningful demand increases in late Q4 and into H1 2025. The return of positive book-to-bill ratios across some device types also indicates that Q2 marks the low point of this cycle.
|
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.
|
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. |