Sourcengine’s Q4 Lead Time Report Takeaways to Prepare for Q1

Every quarter, Sourcengine utilizes real-time market data and robust resources to create a thorough lead time report for the active and passive component markets. Sourcengine’s Lead Time Report details information on the availability of a wide range of electronic components from many chipmakers. This report summarizes the performance of the active and passive component market over the last quarter and how it will impact the new one.

The semiconductor market in Q4 has shown clear signs of stabilization, with most lead times and price trends remaining stable. This includes components that previously faced significant pressure due to high demand, such as solid-state drives (SSDs) and high-bandwidth memory (HBM). Demand for HBM and SSDs, in particular, has been driven by the rapid adoption of artificial intelligence (AI) technologies, which continue to underpin robust demand in this segment.

In 1H25, AI will remain a key growth driver, with widespread integration into various industries fueling demand for advanced semiconductors, including GPUs, FPGAs, and memory solutions. While Q4 saw relative stability in availability and pricing for these components, the market is expected to remain dynamic through 1H25. Analysts caution that renewed shortages could emerge as AI adoption accelerates, particularly if production capacity struggles to keep pace with demand spikes. As such, procurement teams should remain vigilant for potential shifts in supply and pricing trends.

In contrast, the passive component market has experienced significant destabilization in Q4, with lead times lengthening across key categories. The primary cause has been raw material shortages, exacerbated by geopolitical developments, including China's recent export restrictions on critical minerals such as gallium, germanium, and antimony. The ban has placed substantial pressure on global supply chains, leading to delayed shipments, higher price trends, or no supply outright.

Manufacturers face challenges in sourcing adequate raw materials, forcing some to adjust production schedules or seek alternative suppliers, further complicating the market landscape. This has led to increased lead times for critical components and, in some cases, upward pressure on prices. The industry is actively exploring solutions, including diversifying material sources and investing in recycling initiatives, but these efforts will take time to yield results.

Going into Q1, most companies expect tepid demand across major market sectors, like consumer electronics. Most demand will stay within AI, high-performance computing, data centers, and the power industries.  

Q4 2024 Electronic Component Lead Time and Price Trend Takeaways

The semiconductor market saw a relatively stable end of the year, with AI fueling the majority of demand in memory. Comparatively, prices and lead times were trending up in PEMCO, likely due to geopolitical tensions between the U.S. and China.  

• Microchip and NXP Semiconductor are seeing increased lead times across their embedded processing products. NXP’s 8/16/32-bit products have a maximum lead time of 52 weeks.
• Power products by ABB, Artesyn, Bel, MEAN WELL, Murata, TDK, and Lambda are rapidly increasing prices and lead times. The average lead time across suppliers is now 32 weeks.
• Western Digital, Samsung, and Micron have stabilized lead time and price for their storage products, including SSDs. This is a significant change from Q3, when demand and external supply chain disruptions severely impacted constraints.

The market conditions in Q4 left the market relatively stable at 1Q25 compared to Q3. Excess inventory has been mitigated, with only a few surplus spots remaining. Efforts to digest the remaining inventory will continue throughout 1H25. TrendForce analysts reported that DRAM and NAND flash would likely be the leaders in low market spot prices and tepid demand due to years of excess.  

Quarter-Over-Quarter Comparison

When looking at what happened in Q4 and how it is impacting the current market in 1Q25, several key areas contribute to ongoing trends.

1. China’s ban on critical minerals, such as gallium, germanium, and antimony, has not yet been rescinded despite President Trump's rollback of AI restrictions. Should these restrictions stay in place, the power product market could experience greater instability due to raw material shortages and high demand from data centers.
2. Consumer demand remains tepid and likely will remain so through Q2 and possibly Q3. Analysts have remarked that 2025 might see lower growth than 2023 due to the strong rebound from 2023’s major glut.
3. The inauguration of President Trump was quickly followed by the introduction of DeepSeek-R1 and Stargate, which caused a lot of activity within the AI market. Based on the news surrounding DeepSeek, it will be interesting to see if prices for AI components trend down in 1H25.

The semiconductor market is expected to remain relatively stable, though the demand for AI-related technologies will require careful monitoring. Any production constraints or unforeseen disruptions could lead to renewed shortages, especially for high-demand components like HBM.

The passive component market, however, faces a more uncertain trajectory. The lingering effects of geopolitical tensions and the booming demand for power in data centers will likely continue to impact lead times and pricing well into 1H25 and early Q3. Companies should proactively consider strategies to mitigate risks, such as seeking parts with greater multi-source availability and working with global distributors with experts skilled in securing hard-to-find components and obsolescence management.

While the semiconductor market has largely stabilized, ongoing demand from AI and emerging technologies may introduce volatility. Meanwhile, the passive component sector faces a more challenging path, underscoring the need for proactive risk management and supply chain diversification. The new Trump administration is still in its early days. Still, campaign promises of tariffs could lead to disruptions if the administration takes a more rigid stance on protecting American interests.

For now, Trump has reeled back AI regulations, undoing some of Biden’s restrictions on AI limitations. However, the recent announcement of Stargate and its $500 billion price tag may indicate that the Trump administration may simply replace Biden’s controls with its own. As with many other suppliers, we are taking a “wait and see” approach to better understand how the supply chain may evolve under Trump’s leadership.

For more information and forecasts for embedded devices, advanced analog parts, and programmable logic components, check out Sourcengine’s Q4 2024 lead time report.