Leadtimes and prices in the electronics component market will remain largely stable through the end of July, according to Avnet Electronics Marketing's latest Market and Technology Trends Report.
The report is generated monthly by Avnet component specialists compiling data from customer orders and input from component suppliers. The data represents about 90 percent of the distribution component market.
With only a few exceptions, prices and leadtimes for semiconductors, interconnect, passive and electromechanical components will remain stable through the end of July. “Stability in the market is generally good news for buyers,” said Alex Iuorio, senior vice president, supplier marketing for Avnet Electronics Marketing Americas. “If leadtimes are stable and prices trending down, the customer community can take the opportunity to shop around for lower prices.”
The industry has been in a long period of stability, said Iuorio – products have largely been readily available. Buyers should remain cognizant of any shifts in the market. “In the last seven or eight years we haven’t had a real product restriction,” he said. “If we start to see even minor changes, we recommend paying attention. We go to our customers and ask if they are making necessary changes to their [order and supply chain] plan – should they be looking at longer horizons and booking orders farther out? Even if [distributors] have a 52-week forecast, we can still change it within 30 days. If the pipeline isn’t tight, we can pull product back in . Even a small percentage change [in the overall market] affects buyers when you have seen a period where product is always available.”
For example, in July’s report, leadtimes and pricing for discrete components and memory were both were moving upward. “What is driving memory demand is NAND, which is a basic components in SSDs," Iuorio explained. "SSDs are encroaching on mobile and media applications and that affects NAND directly. We see customers repositioning memory—particularly what memory gets used in what end-products. It has a ripple effect in all memory products.”
In discretes, Iuorio said, a shift in capacity is impacting leadtimes and prices. "If you look at what investment in capacity is happening, that investment is not in the larger geometries, which is the purview of discretes.”
Prices and leadtimes were also moving upward for military passive products. The military sector in general is soft, says Iuorio, with uncertainly associated with sequestration and the budget. However, he said, the supply base for military passives is a relatively small population — component makers must go through rigorous qualification to sell to the military. These suppliers are adjusting their capacity. “I don’t think we’re seeing any kind of [capacity] declines — I think suppliers are adjusting their capacity to demand,” Iuorio said. Traditionally, he explained, these suppliers build to forecast, which remains uncertain. “I think this relatively small group is shifting capacity to firm demand, which might cause leadtimes to move out.”
Electronics Purchasing Strategies will be running Avnet’s Market and Technology Trends Report monthly beginning in July.