Demand to return in H2
Currently there are bloated inventories for components like memory, small case-size ceramic Capacitors and automotive MCUs, but FPGAs, analogue ICs, power mosfets, MCUs and discretes remain constrained and costly.
In Q3, lead times for all electronic components will reduce compared to Q3 2022 with nearly 60% of component lead times decreasing versus 1% in Q3 22 with none expected to increase compared to 73% in Q3 22.
Despite inventory reductions that will likely be complete by the end of H1, IC orders, wafer starts, and capacity utilisation will begin to rise and memory pricing will reach its bottom in H2. DRAM prices will start to recover in Q3 and NAND pricing will follow in Q4 or early in 2024.
Demand increased by 7% m-o-m in January, with all regions rising except Asia, which declined by 14% from December to January.
In EMEA, growth was driven by significant sourcing action increases in Germany (44%), France (37%), Italy (32%), Israel (15%), and the United Kingdom (55%).
Month-over-month through January in these countries, transistors, including constrained IGBTs, rose sharply by 68%, microcontrollers and microprocessors climbed by 34%, capacitors expanded by 30%, and diodes were up by nearly 40%.
Electronic component demand is forecast to be weaker in H1, compared to H1 2022, with Q1 anticipated to grow 1% versus Q4 2022.