Growth, lead times, pricing and more

TTI’s senior VP, product & supplier marketing, Lew LaFornara

TTI’s senior VP, product & supplier marketing, Lew LaFornara, explores growth sectors, component availability and question marks regarding 2024 pricing  

Regarding OEM sector growth in 2024, I see mil-aero/defense, space, commercial aviation and the medical OEM market segments continuing to expand with the explosive growth in AI leading the way in the high-end computing segment. Transportation will flatten or reduce slightly, though EV and electronics content growth will offset lower demand.

I expect continued weakness well into 2024 in the general computing, communications, mobile phone and consumer markets. While underlying trends for industrial are strong, we are seeing the weakening overall economy, higher interest rates/cost of money, continued inventory normalization and geopolitical concerns lead to a pause in spending and new investment.

Turning to component availability, lead times should come down and delivery performance improve in 2024, though component availability will remain tight in mil-aero/harsh environment sectors due to increased product demand and higher complexity. There will also be continued tight supplies in older technologies for chips and passives, and high-power/new energy/EV products will face continued challenges. 

Pricing is a big question mark for 2024. Customers are looking for price reductions/cost downs after years of high inflation, while suppliers experience cost increases as they look to recover to or maintain historical profit levels. The result will likely be a leveling or increase of prices.