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Jabil's Global Commodity Intelligence Archive
Global Commodity Intelligence
Q4 2022
Jabil's Global Commodity Intelligence Archive
Global Commodity Intelligence
Q4 2022
Executive Summary
Q4 2022
Conflicting Signals Continue to Cloud the Outlook
Welcome to the Q4 2022 edition of the Global Commodity Intelligence report. For the first time in many quarters, we are beginning to see some relief in certain commodity segments. As the pace of demand has slowed, especially from the PC, consumer and Chinese handset related segments, the break is giving suppliers time to replenish factory inventories and catch up on required factory maintenance with equipment utilizations dropping to more normalized rates. Across many standard commodities, we are starting to see lead times decrease, but remain high as we hopefully begin the journey back to traditionally forecasted lead times.
However, not much has changed for Analog Power & Signal, Microcontrollers, FPGAs, certain Resistor and Discrete product families. These commodities continue to be the gating items and may be the last parts required to complete a Bill-of-Materials (BOM). In addition, these hard-to-get parts are helping drive inventory levels to new heights in the EMS, Distribution, Consumer & PC segments. Pricing for raw materials such as Copper, Gold, and Silver, may have peaked, however they remain at historically high levels and keep component price reductions at bay.
Here are some recommendations to help supply chain flexibility and ensure continuity of supply:
- Long lead times for hard-to-get commodities - It is imperative to give the suppliers as much visibility as possible. Some suppliers are requesting up to eighteen (18) months of visibility and will continue to enforce NCNR policies.
- Supplier technology roadmaps – Please work with your design and engineering teams to understand and follow technology roadmaps from the suppliers. This is where suppliers are investing in the future and mature/legacy products will be harder to acquire, possess longer lead times and in many cases, become end-of-life (EOL). This is a recurring theme for many larger case size products across all passive component families.
- New supplier qualification – As many tier-1 suppliers clearly map out their investment future for products and capacities, other new suppliers are working to fill some of the voids left on this journey. Having multiple suppliers qualified by part number and commodity helps to provide flexibility and support “continuity of supply”.
As the market for electronic components transitions, the rate of change will be driven by overall end market demand, additional new capacity coming online and the alignment of inventories through the ecosystem. We will continually monitor these shifts to drive continuity of supply, supply chain agility and competitive pricing.
If you have any questions or need additional support, please do not hesitate to contact the commodity management team or me directly.
Graham Scott
Vice President, Global Procurement
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