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Jabil's Global Commodity Intelligence Archive
Global Commodity Intelligence
Q1 2025 | JANUARY - MARCH
Jabil's Global Commodity Intelligence Archive
Global Commodity Intelligence
Q1 2025 | JANUARY - MARCH
Executive Summary
Welcome to the Q1 2025 Electronics Commodity Review
As the new year approaches and a new U.S. administration prepares to take office, the electronics industry is bracing for a complex landscape of proposed tariffs and potential trade sanctions. The presidential transition could bring challenges not only with imports from China but also from Mexico, which has been a key manufacturing hub for companies pursuing a China+1 strategy. In the coming weeks, businesses will be required to assess their supply chains and explore options to adapt to potential policy changes.
With the exception of memory - both DRAM and Flash, including derivative products such as solid-state drives, and Tantalum Polymer capacitors - the market is in a relatively balanced supply/demand equilibrium. In addition, inventory levels across the ecosystem have normalized and most suppliers are now planning for any tangible pick-up in business forecast into the second half of 2025.
In response to the current market conditions, suppliers in both the passives and semiconductor segments have scaled back capacity, with some passive suppliers below 70% utilization and semiconductor suppliers in the 65% - 80% range. At these levels of utilization, and with inventories normalized, any unplanned pickup in demand could rapidly extend lead times and have an overall tightening effect on the market. Increasing factory utilization also takes time to spin up which would exacerbate the issue.
As we move into Q1, the notable market trends to follow include:
- Data center business from the largest hyperscale companies remains extremely robust and is forecast to be strong throughout 2025.
- The Chinese automotive segment, particularly EVs, is also a bright spot in the market. This is driving growth for indigenous Chinese suppliers, along with the China for China OEM strategy to 30% - 40% growth rates.
- Even with import regulations for the most advanced semiconductor manufacturing equipment, leading-edge Chinese semiconductor companies are winning sockets in ADAS, Cockpit SOCs, and connectivity which had previously been held by US and European semiconductor companies
- Commodity pricing, along with logistics and global labor inflations will offset some weakness in the market and impact price volatility
The Jabil Commodity Management team will remain vigilant, closely monitoring the evolving landscape and current market dynamics to mitigate risks and enhance supply chain agility. If you have any questions, please feel free to contact the commodity management team or me directly.
Graham Scott
VP, Global Procurement
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