By clicking the “I Accept” button, or by accessing, participating, or submitting any information, or using the Jabil Global Intelligence Portal or any of its associated software, you warrant that you are duly authorized to accept the Global Intelligence Portal Terms and Conditions on behalf of your Company, intending to be legally bound hereby, and your company shall be bound by the terms and provisions of the Global Intelligence Portal Terms and Conditions, accessible under the following link Portal T&Cs.
Jabil's Global Commodity Intelligence Archive
Q3 2022
Jabil's Global Commodity Intelligence Archive
Q3 2022
Executive Summary
Q3 2022
More of the same…but entering the back half of the year gets murky
Welcome to the Q3 2022 edition of Jabil’s Global Commodity Intelligence. In this issue, we cover the current market conditions across all the commodities and provide insights and recommendations to address supply, market dynamics and pricing trends.
As we have previously reported, most of the electronic component’s commodities remain constrained to ‘highly’ constrained entering the 3rd quarter. The most problematic commodities continue to be in microcontrollers, analog, discrete semiconductors, programmable logic, general purpose logic, timing devices and resistors. The shortages and highly extended lead times for these commodity families have a tremendous impact on the rest of the bill of materials (BOM), as without these devices production cannot fulfill factory orders and support end market demand. This is also having a significant impact on inventories throughout the ecosystem with pockets building at EMS, suppliers, and OEMs unable to complete the BOM.
Demand continues to be robust with some easing in the PC segment, ‘work from home’ related products and overall consumer devices. These segments have been impacted by the China Covid lockdowns, mass testing policies and slowing global economies as financial regulatory bodies raise interest rates to taper inflation. Most other segments such as automotive, 5G rollout, data centers supporting AI & ML and industrial continue to thrive creating a supply/demand imbalance across the supply chain.
Some specific themes emerge through the various commodities:
- Inflationary Price Pressures – increased raw material costs (metals, precious metals, gases, resins, etc.) along with extended lead times and recurring shortages are causing many manufacturers to pass along price increases. This is further compounded by freight and logistics disruptions and increased costs due to higher fuel prices.
- Manufacturers' Product Strategies – many suppliers across all commodities are using the high demand environment to prune their product strategies by announcing EOL and/or additional price increases for several legacy and less profitable parts of their portfolios. This has created an opportunity for newer ‘follower’ companies to pick up the slack and use it as an entry to the market. At the same time, leading suppliers are exiting certain end market segments. Most of these developing suppliers are in China and Vietnam and need to be considered/qualified as alternative suppliers.
- End-of-the-Year Uncertainties – despite the continued highly constrained market, there are some small indicators that things may be peaking. As the consumer and PC segments experience some slowing, it is providing a respite to certain markets and customers that use the same technologies. However, critical parts remain critical. In addition, as some of the many investments for additional capacity across commodities come online, any slowdown in demand could help to accelerate an overall supply/demand balance later in the year but any major improvement is not likely before the first half of 2023.
The Global Commodity Management team continues to work with our supplier community to manage continuity of supply while mitigating production disruptions. There are specific actions outlined in this edition that require a collaborative effort with our customers to help manage the supply base and evaluate new and/or developing suppliers.
If you need additional assistance or specific customer support, please do not hesitate to contact the respective commodity manager or me directly.
Graham Scott
Vice President, Global Procurement
Back to Top