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Weak demand is slowing down the pressure on electronic components delivery

Weak-demand-is-slowing-down-the-pressure-on-electronic-components-delivery

According to the survey, the sales trend of electronic components continued to decline in September this year, and the delivery time of most components is shortening. On the whole, the relevant index has declined for six consecutive months, with 86.0 in August falling to 82.3. A reading below 100 indicates a pessimistic sales outlook.

Market growth is slowing down

Market-growth-is-slowing-downAccording to analysis, more and more bank executives and financial analysts are pessimistic about the prospects for 2023. A series of economic indicators reflect that everyone’s concerns are not groundless. As far as electronic components are concerned, the normal cyclical behavior of the market is consistent with the economic outlook. After a period of strong growth, the market has obviously started to enter a downward cycle

According to analysis, more and more bank executives and financial analysts are pessimistic about the prospect of 2023. A series of all flash data storage system suppliers say that only a few types of components are still 100 weeks old. As a part of the Design for Supply Chain (DFSC) process, engineers and purchasers should consider the delivery time of relevant components when developing and launching new products.

Economic indicators reflect that everyone’s concerns are not groundless. As far as electronic components are concerned, the normal cyclical behavior of the market is consistent with the economic outlook. After a period of strong growth, the market has obviously started to enter a downward cycle.

According to analysis and speculation, the problem is not whether the market will weaken, but the speed and depth of market decline. There will be a “crash” in the industry in the future, but everyone has different views on this view. The electronic trading market tends to be diversified, which can ease the speed of market decline.

Electronic components sale tread and manufacturing index all are in decline

Electronic-components-sale-trend-and-manufacturing-index-all-are-in-declineThe data shows that the US manufacturing activity is continuing to weaken. In September, the US manufacturing index was 50.9%, which has hovered on the edge of contraction.

The US manufacturing index is growing continuously, but its growth rate is the lowest since the COVID-19 epidemic began to recover. It is reported that after ISM team members reported that the new order rate of enterprises was weak for four consecutive months, the manufacturing index in September reflected that everyone was making adjustments for the future demand decline. A reading below 50 indicates that the economy is contracting.

The data shows that the sales trend of components in September is different due to different product categories. Among them, electromechanical components decreased by 16.7 percentage points, semiconductor devices increased by 7.2 percentage points, and passive components decreased by only 1.7 percentage points.

The outlook for October has become everyone’s expectation. It is expected that the overall index will rebound 5.7 percentage points in October, mainly thanks to emerging markets and passive components, which will rebound more than 10 percentage points, while semiconductor devices will decline 3.6 percentage points.

Although this news is encouraging, the manufacturing index in the whole October was only 88.0, which means that the market growth is slowing down.

Prospect of the terminal market

Prospect-of-the-terminal-marketIn September, the manufacturing index of the terminal market rose by 0.9 percentage points, and its development trend was relatively stable, but in October, the number will drop to 77%. Index differences between components and terminal markets, or affected by the use of different components in different markets.

In September, the index of the terminal market generally improved, among which the automobile, mobile phone, telecom network and medical electronics sectors rebounded significantly. The automobile and medical electronics index exceeded 100, while the military/aerospace index remained at a high level close to 117. However, in October, the growth of most of the above industries will be lower than that in September, and only military/aviation and automobile will remain at 100 or above.

Consumer electronics products faced a sharp decline in September, and this category will continue to decline in October, and the index is far lower than other markets. In the short term, sales in all market segments will remain weak, and this trend will last at least throughout October.

However, those enterprises suffering from long delivery time are seeing that the pressure on delivery time is tending to ease, and the continued weakness of sales has also improved the problem of supply chain tension. Some people think that the long lead time of passive products has been significantly improved in September. The lead time of semiconductor devices has also been slightly improved. EMC components have lost the advantage of shorter lead time. In general, the delivery dates of the above three types of devices have been improved.

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