Source: China PCB technology network

According to iSuppli, although the price recovery trend of the global electronic component market in the second half of 2009 will significantly slow down in the first quarter of 2010, it is expected that the price decline will be relatively mild due to the roughly balanced supply and demand. Among the 15 categories of electronic components tracked by iSuppli's component price trend tracking (CPT), eight categories of prices rose in the third quarter, with the largest increases being memory, analog devices and printed circuit boards (PCBs). It is expected that the range of price increase in the third quarter will be wider, with 12 categories of components rising, led by memory, PCB and logic devices.

However, due to the seasonal decline in demand in the first quarter, 14 of the 15 categories of electronic components will fall in the first quarter of 2010, and only the prices of logic devices and some analog devices will be higher than those in the fourth quarter of 2009. However, the price decline of most components is expected to be less than 1%.

Such a quarter on quarter decline is not surprising, and it is much better than the miserable situation in the first quarter of 2009. At that time, the prices of 12 of the 15 categories of electronic products fell by more than 1%, and the prices of memory and transistors fell by 10.5% and 9.5% respectively.

The main reason why the price decline in the first quarter of next year will remain moderate is that component suppliers are cautious and conservative in increasing production capacity.

Although the worst of the depression has obviously passed, and the enterprises on the verge of bankruptcy have obviously recovered, the future growth prospects are still unclear. This uncertainty is the main reason why component suppliers are slow to increase production capacity and manpower. ISuppli believes that component manufacturers will remain cautious until the outlook becomes clearer and the trend of sustainable economic growth is obvious. Some factors may cause the price trend to deviate from iSuppli's outlook. For example, if the demand in the first quarter of 2010 is stronger than expected, component suppliers may abandon their conservative practices and begin to increase production and recall workers laid off in 2009. Otherwise, component suppliers will continue to hold a conservative wait-and-see view. Although supply growth is constrained, there is no sign of a general shortage. As demand returns to normal growth in 2010, suppliers should be able to respond, even if it may be a little late. However, there are some exceptions. For example, analog power devices are expected to encounter some supply shortages in the first half of 2010.