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Jabil's Global Commodity Intelligence Archive
Q4 2024 | OCTOBER - DECEMBER
Jabil's Global Commodity Intelligence Archive
Q4 2024 | OCTOBER - DECEMBER
Executive Summary
Market conditions continue to be stable, with balanced supply and demand for most commodities. The exception remains High-Bandwidth Memory (HBM), which continues to be tight due to data center growth to support AI expansion. It should be noted that the focus on HBM and the shift of capacity have resulted in a constrained market for FLASH, high-performance DRAMs, and memory cards.
Most broad-line semiconductor suppliers are reporting a bottoming of the market with some anticipation of a pickup in Q4; however, with cautious optimism, the overall consensus for more broad-based growth is now being pushed into the beginning of 2025.
The market’s uncertainty is driven by the upcoming US elections, the potential impact of new or additional tariffs, geopolitical unrest in various regions of the world, and the continued “de-risking of China trade.”
As lead times plateau at the current levels, there has been minimal flexibility for order adjustments. Many suppliers require extra visibility into forecasted orders to rationalize end-market demand and help plan factory loading. With global inventory at more traditional levels and many suppliers running at reduced capacity, there is some concern that the market could tighten quickly with any unexpected rebound in demand across multiple segments.
A few key points from the review:
- Book-to-bill ratios are hovering around 1:1, with many suppliers still “throttling” capacity and output to match overall demand.
- AI continues to be the driving force in overall growth. Suppliers with product portfolios in the data center and hyperscale customer segment are leading in revenue growth.
- Geopolitical tensions have prompted suppliers of semiconductors, passives, and PCBs to initiate new CapEx investments across different geographical territories amid uncertain market and political conditions.
- Out of China (OOC) – there is continued momentum across the supplier community to mitigate risk while hedging moving additional capacity and supply chains out of China with the search for solutions in Malaysia, Thailand, Vietnam, and Mexico.
The Jabil Commodity Management team continues to monitor the electronics ecosystem and respond to environmental changes to mitigate risk and increase 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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