Main Highlights
Quarter one of 2024 started to see the slow decline in global inflation, and the IMF forecast global growth to continue to grow 3.2% this year and next. To date, Germany has seen a growth with GDP increasing by 0.2% - often a key indicator of how Europe is set to perform – showing even greater growth were Spain and Portugal recording 0.7%. Predictions that the European Central Bank will start cutting rates from June in response to falling inflation are circulating.
Asia Pacific is also looking at growth during 2024 (4.5%), with it largely predicted to be from domestic demand, as the economy now settles to post-pandemic. At the back end of April 2024, the world saw news that the Japanese Yen had fallen to its lowest levels in over 30 years (since April 1990) to 160.17 to the USD. This soon led to a very quick recovery with hours, but risks the destabilising of other Asian currencies against the dollar. A weakened Yen could be more long term and potentially cause issues for Japan and its attractiveness to foreign investors.
Container ships are still re-routed with the ongoing Red Sea crisis; however, some route and timing predictability and reliability is now stabilising.
On 3rd April 2024, Taiwan was hit by a 7.4 magnitude earthquake close to Hualien City. Taiwan’s earthquake alert system failed to send an advance warning of the mainshock, due to its initial force predicted to be around 6.2 magnitude. This was the strongest earthquake Taiwan had felt in over 25 years.
Capacity and lead-time issues
- Following damage to Murata’s Anamizu plant (manufacturing chip inductors and common choke coils) production is expected to resume from mid-May 2024 onwards. Alternate production sites have been utilised at Yokkaichi Plant and in Malaysia to help support the recovery.
- All other impacted Murata Plants have now re-started production activities.
- TSMC estimated losses of over $90M after the Hualien earthquake, however disruption is not expected to cause mass ripples of disruption in the supply chain.
- Lead times in general are now at the ‘new normal’ and have stabilised from the years of disruption that started impacting passive components in summer of 2018.
- Whilst lead-times are shortening, inventory is also high. This still means accurate forecasting and appropriate order scheduling is kept up, if not the market risks outstripping supplies again very quickly with any surge or market uptick during this year.
Manufacturer Mergers/Acquisitions
- Ansys is set to be acquired by Synopsys in $35B deal.
- Qorvo reached an agreement to acquire Anokiwave.
- Amphenol to acquire Carlisle Interconnect for $2.025B and separately acquire AIRMAR.
- Intel announce they will acquire Silicon Mobility.
PCB Technology
- PCB factories, especially in the Far East have additional capacity, meaning leveraging pricing now could be fruitful. However, how long this available in capacity will last is unknown and once factories secure orders pricing will shortly thereafter tighten.
- Recyclable PCB material is being pioneered by the University of Washington – such a material widely used would significantly reduce E-waste in PCBA supply chains, allowing components to be removed from the jelly-like substance of the PCB allowing the PCB to be re-used.
Global Economy
- Oil pricing has continued to steadily climb over the last quarter, today trading at $86.33 per barrel.
- Gold has continued to climb, selling at £1,839.32 per ounce at time of writing.
- Silver has recovered to £21.17 per ounce, a double digit 16% increase over the past 3 months.
- Steel rebar is still stable, 3 month contracts are listed at $587.50 per tonne when writing.
- Bitcoin started climbing dramatically, reaching never before seen highs – now selling at $58,153.40 an increase of 64% over a six month period.
- Copper pricing has risen again, now $9,973 per tonne.
