Electronic components’ sales sentiment continues its moderating trend that began in July as the overall average component index dropped 4.9 points to 136.7 in August, according to Electronic Component Sales Trends (ECST) survey from the Electronic Components Industry Association (ECIA).
A score of above 100 represents growth in the ECIA report.
In July, the index fell 12.5 points but overall growth continued as the average score remained above 100. In August, this moderation continued after reaching a five-year high in June.
Looking ahead to September, the ECIA forecasts overall sentiment to remain essentially flat month-to-month, coming in at about 135.4 points.
Peak sales growth
As part of the ECST, the results from the third quarter show expectations of sales growth reaching peak. As the third quarter ends in September, respondents said growth will top between 5% and 27% depending on the segment. Most of those surveyed see a cooling in sentiment looking toward Q4.
End-market sentiment
ECIA said the end-market mirrors the component scores as overall sentiment dropped from 145.0 in July to 138.5 in August. It is projected to fall another 7.7 points to 130.8 in September.
However, every market score is expected to remain at about 100 in September. This includes mobile phones which fell below 100 in August.
The results for sales sentiment for the end markets paint a highly positive picture of the current state of the market, ECIA said.
Mixed results
Among manufacturers, distributors and manufacturer representatives, the results were mixed. Manufacturers had the most positive results in August and looking ahead to September. Meanwhile, distributors are more pessimistic in August but matches the outlook for September. Manufacturer representatives were the most modest in August and are expected to experience a slight drop in September.
Lead times still high
Maybe the most concerning aspects of the electronic components market is the lead time report that found about three-quarters of the survey respondents seeing lead times increasing across all major component categories with no reports of decreasing lead times.
While lead times for dynamic random-access memory (DRAM) and data flash memory are making headlines, lead time pressure is being experienced across all products. But these turbulent forces are not hindering confidence among electronic component supply chain leaders, ECIA said.
About the ECIA ECST report
The ECST survey provides highly valuable and detailed visibility on industry expectations in the near-term through the monthly and quarterly surveys. This “immediate” perspective is helpful to participants up and down the electronics components supply chain. In the long term, ECIA shares in the optimism for the future as the continued introduction and market adoption of exciting innovative technologies should motivate both corporate and consumer demand for next-generation products.
The complete ECIA ECST report is delivered to all ECIA members as well as others who participate in the survey. All participants in the electronics components supply chain are invited and encouraged to participate in the report so they can see the highly valuable insights provided by the ECST report.
The monthly and quarterly ECST reports present data in detailed tables and figures with multiple perspectives and covering current sales expectations, sales outlooks, product cancellations, product decommits and product lead times. The data is presented at a detailed level for six major electronic component categories, six semiconductor subcategories and eight end markets. Also, survey results are segmented by aggregated responses from manufacturers, distributors and manufacturer representatives.
Interested in reading the entire ECST report? Visit ECIA's website for more information.
