Component supply problems to last into H1 2023

Extended lead times, geopolitical uncertainty, and elevated logistics and labor costs will remain problematic for the electronics industry into the first half of 2023, according to Supplyframe.

Supplyframe forecasts that 52% of all electronic component lead time dimensions will decline or stabilize in Q3 – down from a Q2 forecast of 80%.

Lead times of ceramic capacitors improved a-o-a, and electrolytic capacitor availability is on track to stabilise in Q1 2023.

PCB lead times are expected to decline by the end of the year.

NAND flash availability is improving, positively impacting the lead times of solid-state drives (SSDs).

Memory devices are declining  for volume, contracted purchases. Blended DRAM average ASPs are on the decline.

Demand declined Q1-Q2 except for programmable logic devices, which experienced a 9% increase,

Softening consumer demand, particularly in China, and economic concerns are the main culprits, with q-o-q  sourcing actions contracting by 7% and by 11% from May to June.

Capacitor and resistor demand shrunk by 12%, driven partly by order push-outs and cancellations as customers waited for long-lead-time semiconductors.

Other passives’ lead-times contracted by single-digit percentages.

Global demand was down 11% month-on-month in June versus historical 4% increases, with Asia-Pacific and the EMEA region declining by 11% and 14%, respectively.

Memory demand dipped 6% from Q1 to Q2. It’s forecast to decrease again in Q3 by 2%.

Server DRAM demand is robust, but contracting demand in PCs, laptops, and smartphones are impacting DRAM pricing.

PC OEMs are reducing their H2 DRAM volume forecasts by up to 30% or more beginning in Q2.

These oversupply indications for consumer devices are profound and have led component suppliers to limit their production and decrease their prices. Hynix and Micron are reassessing capacity investments for 2023, and  TSMC is reducing its expansion spending by as much as 9%.

“Sharp declines in PC and smartphone component demand are concerning, but we don’t expect an oversupply of semiconductors, as demand in such sectors as automotive, industrial and medical remains robust,” says Supplyframe CMO Richard Barnett.