Q2 2024 Electronic Components Lead Time Report Highlights

Every quarter, Sourcengine utilizes real-time market data and robust resources to create a thorough lead time report for the active and passive component market. Sourcengine’s Lead Time Report features up-to-date information on the availability of 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 over the next few months.

During the last quarter, artificial intelligence (AI), industrial controls, and automotive intelligence technology fueled demand for electronic components. Memory suppliers are seeing high orders for DRAM, NAND-flash, and storage components as artificial intelligence technology companies build new applications. Due to this popularity, price increases are expected across the memory sector.  

Some chip manufacturers have confirmed shortage-like conditions for specific components. However, many original component manufacturers (OCMs) do not plan to increase production capacity while consumer electronics demand remains low.  

In the PEMCO market, lead times and prices are stable after months of raw material shortages and logistics challenges. This is a welcome relief for many, but some spots of constraints remain.

Q2 2024 Electronic Component Lead Time and Price Trend Takeaways

The memory market continues to experience constraints due to AI’s popularity. During 1Q24, there were significant price increases after a year of low demand. Some suppliers have issued notices to their clients informing them of upcoming price fluctuations due to this pressure.  

As memory prices rise, the PEMCO market is beginning to see lead time and price stabilization after weeks of uncertainty.

The memory market will likely see price fluctuations due to continued demand for AI-capable components. As popular graphics processing units (GPUs), such as those by Nvidia, become more available, companies will build more AI infrastructure and datacenters to support these new initiatives and technologies. Tight supply demand will keep prices high.

Due to component unavailability, the PEMCO market is still grappling with uneven stabilization areas, mostly in military and industrial connectors. Now that raw material shortages and transport challenges have been resolved, there will be greater availability, which could drive down lead time and price in specific sectors.  

Quarter-Over-Quarter Comparison

Artificial intelligence's popularity, growth in industrial controls, and automotive intelligence technology have fueled demand for memory and storage components. Memory suppliers keep supply tight despite recent notices of shortage-like conditions. With low demand in consumer electronics causing concerns, memory manufacturers aim to keep a tight grip on supplies to prevent the global supply chain from tripping back into a glut.

Over the last month, Western Digital Corporation (WDC) and Seagate Technology have alerted customers of upcoming price fluctuations in the next quarter. The shifting prices result from ongoing supply constraints has contributed to the decision by suppliers to raise costs for new orders or changes to old ones. WDC has encouraged clients to notify their representatives as soon as possible should order changes occur, as WDC is limited in its handling of unplanned shifts.  

Other memory OCMs, including SK Hynix, Samsung Electronics, and Micron Technology, are also considering price hikes over the next quarter and into 2H24. The likelihood of this decision has increased since the deadly 7.4 earthquake in Taiwan. While the earthquake's epicenter off the west coast limited the devastation, numerous chipmakers such as Micron, Nanya, Winbond, and Powerchip Semiconductor Manufacturing Corporation (PSMC) encountered some wafer loss and equipment damage.

While recovery was fast, Micron and the others reported that the losses would affect the DRAM and NAND-Flash supply for Q2, no matter how little it may be. As a result, the memory market saw a surge in orders as buyers reacted to the concerns of availability post-quake.  

In the coming weeks, Korean OCMs, including SK Hynix and Samsung, will increase prices on DDR5 by 13% and DDR4 by 10%. Through Q2, the memory market is expected to see the largest price hike out of the other electronic components industry sectors, with an overall 20%- 25% increase. This includes storage components, such as solid-state drives (SSDs), which have seen a spike in demand since the rise of AI.  

Consequently, Samsung’s decision to discontinue its DDR3 products has led to a surge in orders for Winbond and Nanya’s DDR3 lines. Over the next quarter, both companies will increase their prices for DDR3 by 10% to 15%.  

During the second half of the fiscal year, experts believe that the supply-demand gap will begin to exceed 20% to 30%, possibly leading to further price hikes on DDR3, possibly by 100%. High demand for high-bandwidth memory (HBM) may contribute to a DRAM shortage in 2H24 due to capacity crowding efforts by major memory manufacturers.  

In comparison, the PEMCO market is seeing a greater turn toward stabilization. Despite overall easement, aerospace, defense, and automotive components are still constrained. With ongoing demand in these industries, they will likely continue to see supply issues throughout the year.  

For more information and forecasts for embedded devices, advanced analog parts, and programmable logic components, subscribe to Sourcengine's Lead Time Report.