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Q1 2024 Electronic Components Lead Time Report Highlights

Q1 2024 Electronic Components Lead Time Report Highlights

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Every quarter, Sourcengine utilizes real-time market data and robust resources to create a thorough lead time report for active and passive component markets. Sourcengine’s Lead Time Report features up-to-date information on the market availability for a wide range of electronic components from a slew of chipmakers. This lead time covers the current market standings for component lead time and price, with a forecast of how these trends may change in the next few months.

After a year of poor consumer demand, a market rebound is coming. Inklings of recovery were seen in late 2023 as DRAM and NAND reached a price bottom after a year of declines. The memory sector is poised for significant growth, with an expected increase of around 40%. Ongoing popularity of artificial intelligence (AI) applications, specifically large language models (LLMs) and generative AI, is helping fuel demand.  

The electronic components industry isn’t in the clear just yet. Geopolitical volatility from conflicts and trade wars are causing disruptions along the global supply chain. Logistics challenges are rising as two of the most important waterways, the Panama and Suez Canal, are experiencing challenges. Many transport ships have been forced to reroute around Cape Horn or Good Hope respectively, adding days onto lead time averages. Export restrictions on semiconductor manufacturing equipment and raw materials will most likely affect countries unevenly, depending on their status as a restricted country.  

Q1 2024 Electronic Component Lead Time and Price Trend Takeaways

The electronic components industry is slowly emerging from the worst of the 2023 excess inventory glut. Mitigation efforts and inventory correction have made progress at reducing inventory overhang in late Q3 and Q4 of 2023. Research suggests that excess electronic component inventory will remain a problem through 1H24 and that continued mitigation is needed.

According to analysts, there will be a market rebound in 2H24, with the primary growth drivers coming from memory and artificial intelligence.  

  • DDR3/LPDDR3 and DDR4/LPDDR4 are seeing increased lead time and price due to market uncertainty. Buyers are currently stockpiling components. Suppliers will continue to make strategic production cuts to keep supply-demand tight through 1H24.  
  • eMMC and SSD products are seeing increased lead time as cloud computing and digitalization fuel a resurgence in demand.  
  • DRAM and NAND-Flash will see considerable price increases over 1Q24, with the average increase for DRAM being 13%-18% and NAND-Flash being 15%-20%.  
  • Due to logistics challenges in the Panama and Suez Canal, transport delays will likely impact component lines. If these situations continue, rerouting and increased insurance on vessels may affect price and lead time.  

As demand recovers, the semiconductor market will see price increases, mainly within DRAM, NAND-Flash, and storage. Artificial intelligence will be a top priority this year as companies invest in generative AI applications and develop their own LLMs.  

The PEMCO market is still grappling with raw material shortages and high logistics costs, complicated by the ongoing trade war between the U.S. and China and the Israel-Hamas and Ukraine-Russia conflict. Organizations are advised to continue monitoring the market to remain aware of changes, as the slightest shift could cause a massive ripple effect throughout the global supply chain.

Quarter-Over-Quarter Comparison

| Components | Q1 2023 Lead Time
(Weeks) | Q1 2024 Lead Time
(Weeks) | Future Trend | | :---: | :---: | :---: | :---: | | DDR3/LPDDR3 | 22-30 | 9-16 | Up | | DDR4/LPDDR4 | 20-30 | 9-16 | Up | | Flash-NAND | 22-26 | 10-15 | Up | | SSD | 9-13 | 9-13 | Up | | Advanced Analog | 28-36 | 23-41 | Stable | | Passives | 20-35 | 19-37 | Stable | | Interconnect | 16-22 | 15-20 | Stable |

Sustained orders and slow operational scale-up paired with strategic production cuts by manufacturers have led to raised prices. In 4Q23, mobile DRAM saw increases of around 18% on components, which continued into 1Q24. Interest in artificial intelligence, high-performance computing applications, and inventory replenishment have contributed to higher prices in the new year. Samsung and Micron plan on implementing 15% to 20% increases over 1Q24.

This is the same for NAND-Flash and storage, where growing market uncertainty and interest in cloud computing is fueling buyers to stockpile components. These price hikes are expected to continue until the end of the year, as memory will be a primary growth driver for the semiconductor industry’s rebound.  

Based on information from the International Data Corporation (IDC) and World Semiconductor Trade Statistics (WSTS), the outlook for the electronic components market in 2024 is remarkably optimistic. The IDC reports that the semiconductor industry can reach a 20.2% year-on-year (YoY) growth rate thanks to the coming rebound in consumer and corporate demand. Edgewater Research analysts agree that the year will be one of growth but are more tentative about how large it will be. Edgewater believes 2024 will be more of a transitional year with considerable growth expected in 2025.

Some ongoing challenges could evolve into major supply chain disruptions if they persist. The Israel-Hamas conflict has been a devastating humanitarian blow and has spilled into the Red Sea, impacting trade that passes through the Suez Canal. Increased insurance costs and delays from rerouting around Cape Good Hope could have long-lasting effects on the semiconductor supply chain.  

The growing occurrence of billion-dollar weather events may also have disastrous effects on the supply chain. 2024 began with a deadly 7.5 earthquake in Japan that shuttered the production of many chipmakers in the affected region. Luckily, the damage wasn’t too severe. Operations resumed quickly, but these events could have considerable impacts worldwide if damage is more extreme.

Organizations must closely monitor the market during the shift from decline to growth. A rebound is in store for the latter half of the year, but challenges could easily disrupt the supply chain’s vulnerable recovery. For more information and forecasts for embedded devices, advanced analog parts, and programmable logic components, check out Sourcengine’s Q1 2024 Lead Time Report.

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Sourcengine’s Lead Time Report
Strategize for upcoming market shifts through lead time and price trends with our quarterly lead time report.
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Sourcengine’s Lead Time Report
Strategize for upcoming market shifts through lead time and price trends with our quarterly lead time report.
Download now