Citing inventory reductions and corrections likely to be complete by the second quarter, online distributor Supplyframe sees the electronic supply chain returning to supply and demand balance in the second half of 2023.
In its latest analysis, Supplyframe said lead times and prices across most commodities will drop further toward historical norms in the second quarter. The consumer market remains slow but automotive and industrial sectors are booming. PCs, smartphones and data center markets are also expected to rebound in the second half and drive new growth.
“Despite global economic challenges and uncertainties, Commodity IQ shows that commodity supply-demand rebalancing is well under way,” said Steve Flagg, founder and CEO of Supplyframe. “Some electronics commodities and end markets have shown initial signs of recovery through Q1.”
Lead times falling
In the second half of this year, 35% of all semiconductor lead times will decline while just 4% will expand, Supplyframe said.
However, certain devices including power MOSFETs and automotive ICs will continue to have extended lead times. Other passive components will remain at under 12-week lead times.
The memory market continues to be problematic for average selling prices (ASPs) of electronic components with global DRAM eroding and causing ASPs to slide into the third quarter. Spot prices for DDR4 are stabilizing and Supplyframe forecasts a DRAM recovery set for the fourth quarter.
Flexibility in both price and availability exists across many materials commodities and sub-commodities including resins and metals. Overall, just 1% of pricing dimensions are projected to increase and over half will be stable across all electronic commodities in the second half of 2023.