Globally, a recession in 2023 still seems likely, however the economy has not seen the worst of the predicted downturn in Q4 2022. Many countries in Asia will slowly return to work after the Lantern Festival falling on Sunday 5th February 2023.Moreover, China lifted its strict ‘Zero Covid’ policy in December which saw the scrapping of lockdowns and the ending of quarantine.
Capacity and lead-time issues
Reports of a catastrophic fire at a plating subcontractor on 6th Jan - used by Vishay Siliconix and Infineon - have emerged over the last few days. Information at this time is limited, but it is expected that distribution will manage communications regarding effected product lines (MOSFETS) in the coming days and weeks. Both Vishay Siliconix and Infineon are working independently on recovery plans to ensure minimum disruption to their respective customer bases.
Analog Devices are reporting that they are seeing an increase in order book cancellations.
Texas Instruments supply is still not easing, with regular de-commits and a struggle to obtain product on some product groups. Lead times are still being quoted at 88 weeks and beyond.
The majority of semiconductor lead-times are still be quoted to be 52 weeks, whereas passives are currently sitting around 30 weeks, the exception being Panasonic who are still reporting longer lead-times throughout their portfolio.
Price rises are still very visible in the supply chain and regularly being pushed down from the manufacturers across all commodities.
Xilinx have increased pricing by between 8% and 25% on some product groups, this pricing structure came into place on 9th January 2023.
ABB prices have increased, effective 1st February 2023.
Molex pricing increased on some lines with increases of at least 20% seen taking effect on 13th January 2023.
Leuze issued a new price list with prices averaging a 7% increase from 1st January 2023 due to the current challenging economic climate.
Penn Engineering have adjusted pricing upwards by 6% on all parts applicable from 1st January 2023.
Chinese factories are on shutdown for two weeks from 20th January 2023 – 6th February 2023 to celebrate Lunar New Year.With the shutdowns and widespread travel, there is a potential risk with COVID-19 that factories may take longer to come back online after the two-week national holiday if staff fall sick during this time. Lunar New Year can ordinarily bring up to 40 days of supply chain disruption.
Oil pricing is relatively stable and showing a gradual downward trend and is now $87.63 per barrel at time of writing.
Gold has increased and is now trading at $1,954 per ounce which is a 6% 3 month increase.
Silver has risen again, and is now $22.36 per ounce, which is a 9.83% quarterly increase.
Steel rebar is stable, 2-month contracts are now $677.00 per tonne.
Bitcoin is now valued at $22,786.00 per coin having climbed slightly over the past three months.
Copper pricing is continuing to rise, with bids at time of writing at $9,232 per tonne. Copper has continued to climb since lows in July last year.