Rutronik’s VP North America, Terri Walsh, alerts purchasers to the potential impacts of inflation and interest rate rises on the supply chain
The second half of 2022 saw a decline in consumer electronics and personal computing. We expect the decline in those two segments to continue throughout 2023 which should have a positive impact on lead times. However, demand within the automotive and industrial markets continues to be strong as many contract manufacturers and electronic manufacturing services providers are booked through 2023.
Lead times on select products such as high/low voltage power MOSFETs (specifically SiC and GaN MOSFETs), microcontrollers and analog will remain extended through the first half of 2023 as manufacturers bring capacity online in those markets the latter half of 2023.
Inflation and corresponding interest rate increases will have an impact, both at contract and component manufacturers. As interest rates increase, contract manufacturers will look to right-size inventory which will have a negative impact to sales in the channel, particularly the first half of 2023. The increased cost of capital will also put pressure on CAPEX spending required to expand fabrication capacity.
Look for component manufacturers to optimize their portfolio by obsoleting low demand and legacy components. We expect price increases for raw materials and rare earth. This will have an impact on leading edge passive and e-mech components.