Main Highlights
There is some uncertainty over the American economy, with tariffs being implemented on various goods and sectors. The intention is to boost US economic growth and re-shore critical industries. The electronics industry appears to be taking the situation seriously with notable market leaders such as TSMC seeking to further invest in US based plants.
Dieter Weiss of in4ma, suggests the European EMS market could grow by just 3% in 2025 after experiencing double-digit negative growth in 2024.
AI driven growth is expected to continue in APAC during 2025, with suggestions it could increase by 15%. High Performance Computing and AI together are anticipated to drive advanced 2nm chip technology.
Capacity and lead-time issues
- Lead-times still appear stable across all technologies and commodities, however, any seismic shift in the marketplace would soon unbalance this creating almost instantly extending lead-times where safety stocks are outstripped and die banks reserves are consumed
- Forecasting remains a priority, with demand planning being the key risk mitigation tactic to ensure a dynamic and flexible supply chain can be maintained
- Manufacturer Mylar Specialty Films is due to cease operations this year, potentially temporarily disrupting some chip film capacitor and resistor lead-time until new sources are qualified
- The EV market is still in demand, fuelling the use of sensors, power products and connectivity solutions globally
- Chip manufacturers with technology supporting AI such as Nvidia, Intel, Qualcomm and Broadcom are set to be in demand as the market continues to grow, which could constrain lead-times in this area as the trend continues
Pricing considerations
- Lumileds imposed a 10% price increase at the end of January on various packages including LUXEON IR Domed, Rebel and Midpower
Manufacturer Mergers / Acquisitions
- Nissan and Honda have started discussions around a potential merger due to the increased EV market demand
- Nvidia announced plans to expand R and D in Israel with a new $500m data centre lab
Global Economy
- Oil pricing is at a 6 month low, priced at $69.65 per barrel
- Gold has held its value, with a 6% increase over the last 3 months currently £2,250.35 per ounce, still tracking with an all-time high
- Silver fell slightly to £24.98 an ounce since last time of writing
- Steel rebar is still stable, despite rising form the last review of 3 month contracts -- listed at $607 per tonne when writing
- Bitcoin peaked to record highs, but has since dropped to $79,498.38
