To limit additional inventory growth as the electronics industry seeks supply-demand balance, many component manufacturers are reducing production output for applications other than automotive and industrial. Buyers are advised to monitor channel inventories, despite the current environment of low book-to-bill ratios, to avoid availability issues.

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.

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.