According to iSuppli, although the global electronic component market price recovery trend will slow down significantly in the first quarter of 2010 in the second half of 2010, the price decline is expected to be relatively moderate as supply and demand remain roughly balanced.
Of the 15 categories of electronic components tracked by iSuppli's Component Price Tracking (CPT), eight categories rose in the third quarter, with the largest gains being memory, analog devices and printed circuit boards (PCBs). It is expected that the price increase will be more extensive in the third quarter, with 12 types of components rising, led by memory, PCB and logic devices.
However, due to the seasonal decline in demand in the first quarter, 14 categories of 15 categories of electronic components will fall in the first quarter of 2010, and only the price of logic devices and some analog devices will be higher than the fourth quarter of 2009. However, the price decline of most components is expected to be less than 1%.
This quarter-on-quarter decline is not surprising, and it is much better than the first quarter of 2009. At that time, 12 of the 15 categories of electronic products fell more than 1%, and memory and transistors fell 10.5% and 9.5% respectively.
The main reason for the price decline in the first quarter of next year will remain moderate. Component suppliers are cautious and conservative in raising production capacity. Although the worst stage of the recession is clearly over, and companies on the fringe of bankruptcy have clearly recovered. However, the future growth prospects remain unclear. This uncertainty is the main reason why component suppliers are slow to increase capacity and manpower. iSuppli believes that component manufacturers will remain cautious before the prospects become clearer and economic growth is evident. Some factors may cause price movements to deviate from iSuppli's outlook.
For example, if demand in the first quarter of 2010 is stronger than expected, component suppliers may abandon conservative practices and begin to increase production and recall workers who were fired in 2009. Otherwise, component suppliers will continue to be conservative.
Although supply growth is constrained, there are no signs of a general shortage. As demand resumes normal growth in 2010, suppliers should be able to respond, even though it may be a bit late.
However, there are some exceptions. For example, analog power devices are expected to encounter some supply shortages in the first half of 2010.
Of the 15 categories of electronic components tracked by iSuppli's Component Price Tracking (CPT), eight categories rose in the third quarter, with the largest gains being memory, analog devices and printed circuit boards (PCBs). It is expected that the price increase will be more extensive in the third quarter, with 12 types of components rising, led by memory, PCB and logic devices.
However, due to the seasonal decline in demand in the first quarter, 14 categories of 15 categories of electronic components will fall in the first quarter of 2010, and only the price of logic devices and some analog devices will be higher than the fourth quarter of 2009. However, the price decline of most components is expected to be less than 1%.
This quarter-on-quarter decline is not surprising, and it is much better than the first quarter of 2009. At that time, 12 of the 15 categories of electronic products fell more than 1%, and memory and transistors fell 10.5% and 9.5% respectively.
The main reason for the price decline in the first quarter of next year will remain moderate. Component suppliers are cautious and conservative in raising production capacity. Although the worst stage of the recession is clearly over, and companies on the fringe of bankruptcy have clearly recovered. However, the future growth prospects remain unclear. This uncertainty is the main reason why component suppliers are slow to increase capacity and manpower. iSuppli believes that component manufacturers will remain cautious before the prospects become clearer and economic growth is evident. Some factors may cause price movements to deviate from iSuppli's outlook.
For example, if demand in the first quarter of 2010 is stronger than expected, component suppliers may abandon conservative practices and begin to increase production and recall workers who were fired in 2009. Otherwise, component suppliers will continue to be conservative.
Although supply growth is constrained, there are no signs of a general shortage. As demand resumes normal growth in 2010, suppliers should be able to respond, even though it may be a bit late.
However, there are some exceptions. For example, analog power devices are expected to encounter some supply shortages in the first half of 2010.
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