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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
INTERCONNECT COMMODITIES
CONNECTORS
- Most of the suppliers’ factories are running at almost full capacity but there are still facilities that are further constrained due to recent Covid outbreaks in China.
- Many of the suppliers still have backlog that needs to be cleared and therefore we are not seeing much flexibility to support urgent upsides and pull-ins. In terms of bookings, there has been some slowdown in the 2nd half of the year.
- Overall, key supplier’s book-to-bill ratios have decrease somewhat and range from 0.8-1.0:1.
- Raw material (copper alloy, metal strips, and resins) supply availability has shown some sign of easing but will continue to be a challenge until the end of the year. Adding on to the challenge is the current logistics constraints that has caused shipments to take longer than usual to reach their end destination.
- Supply base remains stable with no tell-tale sign of any suppliers exiting the market.
- May 2022: TE Connectivity (TE) has completed the acquisition of Kemtron Ltd. (incl. its subsidiary -Kemtron Sarl), a UK-based company and leading provider of EMI/RFI shielding, environmental sealing, gaskets and components.
- June 2022: Amphenol acquired NPI Solutions, Inc. (“NPI”). Based in Morgan Hill, California and with annual sales of approximately $65 million, NPI is a manufacturer of cable assemblies and value-add interconnect assemblies for industrial applications with a particular focus on semiconductor manufacturing equipment.
- July 2022: 3M announces plans to create long term value through spin-off of health care business.
- New 3M will remain a leading global material science innovator serving diverse end markets, with science and technology, manufacturing, global capabilities, and iconic brands.
- Standalone health care business will be a leading global diversified healthcare technology company focused on wound care, oral care, healthcare IT, and biopharma filtration.
- Despite some raw material pricing trending down (gold, copper, palladium), there are still other raw materials that has not seen much movement (metal, metal strips). Exacerbated by raw material supply constraints (copper alloy, resins), as well as energy and freight costs, we do not foresee opportunities for cost reductions in the near term.
- We continue to see price increases from most of the manufacturers as they can no longer absorb the raw material, energy, and freight cost increases.
- Q4 2022 pricing will continue to be very dependent on raw material pricing, energy, and freight costs, and we do not see any sign of easing. This may persist into the first half of 2023.
- Price increases are still common on legacy product like Headers & Receptacles, D-Sub, and labor intensive RJ45 Magjacks.
GOLD, COPPER & PALLADIUM PRICE TRENDS
Source: CNN Money (http://money.cnn.com/data/commodities/),
KITCO (https://www.kitco.com/charts/interactive-charts/) as of August 25, 2022.
RELAY, SWITCH & BATTERY
RELAY:
- Lead times have remained flat when compared with last quarter. Specific types remain under allocation and have seen lead times increase from TE. The major players, Panasonic, TE, Omron and Fujitsu’s capacity are fully booked until Q1 2023 due to the significant backlogs but new POs can be placed at lead time.
SWITCH:
- Lead times are flat when compared with last quarter, no significant capacity constraints.
BATTERY:
- Lead times are stable when compared to last quarter, we see no sign of any of shortage or supply issue.
SWITCH
- C&K switch is acquired by Littelfuse. Inc in April 2022. The organization and strategy will be released shortly.
- Relay Pricing remains flat when compared to last quarter, but still see some increases due to capacity constraints. We foresee demand decreasing in certain segment and this will positively influence pricing next year, however pricing is forecast to remain at the current relatively higher price levels.
- Switch Remains flat when compared to last quarter, with demand reducing in certain sector markets (such as consumer) we should see cost reduction opportunities next year, but still will remain at a relatively high level when compared to the pre-crisis level.
- Battery Continued upward price pressure driven by key raw material "metal Lithium" price increasing, and the overall demand for batteries driven by EV and ESS business globally. Panasonic CR coin battery demand has increased by close to 20% according to market sources.
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