The main pain point: a perfect storm of costs and visibility

The number one pain point for industrial buyers in 2026 is not an outright shortage like 2021-2022. It is the unpredictable volatility across pricing, lead times, and geopolitics simultaneously, making any planning extremely difficult.

Lead times climbed steadily for 12 months before peaking with a dramatic spike in March 2026, a 67% increase in a single month between February and March, with lead times reaching 40 weeks on certain components. The market had never truly normalized after the post-Covid shortage cycle.

What makes the situation particularly toxic:

When tariffs are announced, threatened, or merely rumored, rational buyers pull purchases forward. This demand compression reduces available stock and drives spot market premiums up almost overnight. Components that were stable at book price for much of 2025 have seen spot market premiums multiply by 2 to 5 times, and even higher in some categories.

The most significant hidden pain point is not price itself. It is part identity and data mismatch: teams waste hours confirming that the reference listed in the BOM is actually the same part a supplier is quoting.

Only 18% of companies have achieved end-to-end visibility across their supply chain. For the majority, the reality looks like fragmented email threads, missed messages due to time zone differences, and the constant fear that something important has slipped through the cracks.

The hardest components to source (excluding memory)

SiC MOSFETs and IGBTs: maximum criticality

SiC MOSFETs, a key technology for electric vehicles and onboard chargers, are in a critical situation at ON Semiconductor. Demand from automotive manufacturers is outpacing available capacity. EV procurement teams must treat SiC allocation as a strategic priority through at least the first half of 2026. Lead times for AEC-Q100 qualified 32-bit MCUs have reached 52 weeks or more across several families. These parts are expected to remain difficult to source through 2028.

Industrial and automotive MCUs on mature nodes

The MCU price war ended in 2025. STMicro, TI, NXP, and Infineon announced price increases effective April 2026, with TI reaching up to 85% increases on certain part numbers. Foundries on mature nodes (40nm to 180nm) critical for industrial MCUs are sold out for all of 2026. STMicro MCU lead times had already reached 55 weeks and the situation is likely to worsen.

Analog and power management components (PMIC, op-amps, ADC/DAC)

The most acute pressure is concentrated on components manufactured on older process nodes, from 90nm to 350nm. These nodes produce analog ICs, power management chips, discretes, and interface chips that appear on virtually every industrial BOM. Precision op-amps, ADCs, DACs, and voltage references used in industrial sensors and medical equipment are seeing a return to allocation. Analog Devices applied 15% price increases across its entire catalog, and 30% on approximately 1,000 military-grade references.

GaN: emerging but already constrained

Chinese export controls on gallium and germanium, implemented in mid-2025, triggered alarm bells as China dominates these supply chains. This adds supply risk for compound semiconductor components such as GaAs and GaN devices.

High-speed connectors and specialty MLCCs

High-speed connectors and multilayer ceramic capacitors (MLCCs) are experiencing measurable tightening as hyperscale data center construction accelerates. Sourcing teams working on data center, industrial computing, or AI-edge applications should proactively build buffer stock in these categories. Murata announced increases of 15% to 35% on passives for AI servers. KEMET (Yageo) raised polymer tantalum capacitor prices by 15% to 30% in Q1 2026.

Legacy logic components and end-of-life parts

Many 74xx, CD4000, and older interface families are end-of-life or severely backordered. Tantalum capacitors, high-voltage MLCCs, and polymer aluminum capacitors critical for defense and aerospace continue to face shortages.

A special case: Nexperia

Nexperia’s wafer supply has been halted since October 2025 following export control measures, meaning there is no raw material feed for new production. The company has provided no confirmed timeline for supply resumption. For teams with Nexperia-sourced discretes, logic ICs, or transistors in their BOM, the practical response is to pursue approved alternative sourcing without delay.

Summary

The strategy that sets successful teams apart is anticipating 12 to 18 months ahead, continuously auditing the BOM, qualifying second sources before they are needed, and abandoning just-in-time practices for critical part numbers.

Are some of these components on your BOM?

If you are facing allocation issues, extended lead times, or unexpected price increases on any of the components mentioned in this article, ARTRONIK can help. We specialize in sourcing hard-to-find, allocated, and end-of-life electronic components through our global network of franchised and pre-approved suppliers.

Fill in the quote request form on this page and our team will get back to you quickly with availability and pricing.

Texas Instruments: An Unprecedented Two-Wave Price Offensive

Texas Instruments was the first to pull the pricing lever, and it did so with a scale rarely seen in the analog market.

First wave — Q3 2025: More than 60,000 part numbers were affected by increases ranging from 10% to over 30%. The move sent a strong signal to the entire market: after two years of aggressive price competition in distribution channels, TI was making clear it intended to restore long-term profitability.

Second wave — April 1, 2026: A new, more targeted round of increases hit digital isolators, power management ICs, and industrial and automotive components. Adjustments this time ranged from 15% to as high as 85% on select part numbers — a ceiling that caught the market off guard.

TI’s logic is consistent with its broader industrial strategy: the company has invested heavily over the past several years in new 300mm fabs in the United States. These price increases are partly designed to absorb the depreciation on those assets and restore margins that were compressed during the 2023–2024 down cycle. This is not a reaction to an immediate supply shortage — it is a deliberate, long-term repositioning of TI’s pricing policy.

NXP: A Second Price Adjustment Effective June 1, 2026

NXP took a measured and direct approach. In an official letter dated May 1, 2026, sent to its customers, the company announced price adjustments effective June 1, 2026, citing inflationary cost pressures across several areas it explicitly describes as “beyond our control.”

The factors officially cited by NXP are:

• Raw materials: Rising procurement costs on key input materials
• Energy: Increased operational costs across the manufacturing chain
• Labor: Wage inflation in production regions
• Logistics: Higher transportation and distribution costs
• Supplier inputs: Upstream cost pressure passed through by subcontractors and equipment suppliers

Notably, NXP provides no overall percentage figure in its letter. Part-specific pricing details will be communicated directly by NXP account managers to each customer individually. This deliberately tailored approach contrasts with the broader public announcements made by TI or ADI, and reflects the highly segmented nature of NXP’s portfolio (automotive, industrial, IoT).

For affected buyers, the recommended course of action is to proactively reach out to your NXP account manager before June 1 to obtain the specific pricing grid for your part numbers and assess the impact on your production costs.

The Rest of the Industry: A Wave That Now Covers the Entire Market

The movement initiated by TI has spread across the industry within just a few months. Here is a summary of the main price increases announced:

Analog Devices (ADI) — effective February 1, 2026 Full product line adjustment: 10–15% for standard commercial-grade products, approximately 15% for industrial-grade, and up to 30% on nearly 1,000 military-spec part numbers (suffix /883).

STMicroelectronics — effective April 26, 2026 ST informed customers of increases citing rising material costs from its suppliers, along with higher energy, logistics, and OSAT capacity costs. Specific percentages by product line have not been made public.

Infineon — effective April 1, 2026 Price increases announced on a selection of power devices and integrated circuits. Details by part number communicated to customers individually.

ON Semiconductor (onsemi) — effective April 1, 2026 Price adjustments on certain products, in line with the broader industry trend.

Panasonic — effective February 1, 2026 Increases of 15–30% on 30 to 40 tantalum capacitor references, driven by rising material costs.

Omron — effective February 7, 2026 Increases of 5–50% across PLCs, HMIs, robotics, relays, sensors, and switches.

Intel & AMD — March and April 2026 Both CPU giants have notified customers of increases across their full processor lineups, in the range of 10–15%.

What Is Driving This Industry-Wide Surge?

Several structural factors are converging to create the conditions for these coordinated price increases:

Raw materials under pressure. Copper prices have risen more than 35% year-over-year. Aluminum, palladium, and silver — all critical to chip packaging — have followed similar trajectories.

Foundries running at capacity. SMIC and Hua Hong are reporting utilization rates above 95%. TSMC has raised prices on 3nm and below nodes by 3–10% for 2026, with similar pressures on mature nodes. Vanguard, PSMC, and UMC are planning 10% increases by Q2 2026.

AI as an unexpected demand driver. AI infrastructure growth is now pulling demand well beyond GPUs: power conversion components, signal chain, connectivity, industrial and automotive electronics are all benefiting from this dynamic — and it is giving suppliers the confidence to rebuild pricing power across broader portfolios.

Inventory cycle turning. After two years of channel oversupply, stock levels are normalizing. Buyers who had been able to leverage competition to secure floor pricing now find themselves in a significantly weaker negotiating position.

What This Means for Your Procurement Strategy

This wave of price increases is unlikely to be an isolated event. It marks the beginning of a medium-term repricing cycle across the analog, automotive, and industrial semiconductor segments. A few actions worth taking now:

• Audit your BOM to identify the TI, NXP, ADI, Infineon, and ST part numbers most exposed to increases, particularly in industrial and automotive product lines.
• Review your procurement schedule on active projects: low-cost channel inventory is disappearing fast following the price announcements, as distributors have already begun revaluing their positions.
• Get ahead of lead times: saturation of 8-inch foundry capacity may create allocation pressure on certain families of analog components and MCUs.
• Diversify your sources: where qualified equivalents exist, identify second sources for the part numbers with the highest budgetary impact.

Sources: Official NXP Semiconductors letter dated May 1, 2026; TrendForce, Semicone Electronics, FTC Electronics, 24/7 Wall St., Manufacturing Dive, Utmel — March/April 2026. Price increase percentages (except ADI and TI Q3 2025) are sourced from distributor communications and specialist trade media; cross-reference with official manufacturer notifications before making procurement decisions.

Because while the widespread general shortage is behind us, the risk in 2025 and 2026 is no longer a global scarcity. It is component-level risk. And that targeted risk can be just as devastating for a production line.

A Perfect Storm Across Multiple Segments

Memory: Unprecedented Price Increases

The memory market is currently generating the most alarm signals. Since Q4 2025, the major memory suppliers — Samsung, SK Hynix and Micron — have shifted to allocation-only contract models, prioritising large hyperscale and AI players. Lead times for DDR4 and DDR5 now exceed 30 to 40 weeks, while HBM demand absorbs a growing share of production capacity.

The result: severe shortages in memory components are projected with price increases of up to 50% by mid-2026. For industrial manufacturers and integrators who have not anticipated this, the bill will be steep.

Discrete and Analog Components: Nexperia Creates a Domino Effect

The Nexperia crisis continues to ripple through the discrete components market. Although Nexperia China has begun producing its own chips and Nexperia Netherlands continues its expansion in Malaysia, lead times remain elevated across MOSFETs, bipolar components and protection devices.

This case perfectly illustrates the fragility of supply chains relying on a single supplier: the Nexperia situation demonstrated how quickly a single-supplier dependency can cascade across an entire sector.

NXP: Lead Times Exceeding 52 Weeks

The S32K automotive MCU family, particularly the S32K1 series, remains under pressure with lead times exceeding 52 weeks in some regions due to sustained demand. The NXP shortage is expected to persist in certain application segments through 2026, with geopolitical risks, long product lifecycles and regulatory constraints continuing to intersect.

Tariffs: A New Structural Factor

Beyond supply tensions, geopolitics is reshaping the landscape. Industrial buyers entered 2026 with very different semiconductor cost structures compared to two years earlier, primarily due to significant increases in US tariffs on Chinese components. New non-tariff measures around emerging technologies and raw materials — including export restrictions on advanced semiconductors and critical minerals — are adding further pressure to existing trade tensions.

China controls approximately 79% of global tungsten mine production, a material essential to chip manufacturing. Chinese tungsten exports fell by approximately 40% in 2025, with no practical alternative available at scale.

Why Validating a Secondary Source Is No Longer Optional

Faced with this context, the traditional purchasing strategy — one component, one supplier, one lead time — has become a risky bet. Companies that perform best in volatile supply environments share several characteristics: their engineering teams design with flexibility in mind, their supply chain managers maintain strong distributor relationships, and their manufacturing partners engage early in product development.

Validating a secondary source — that is, qualifying an equivalent component from an alternative manufacturer — offers several concrete advantages:

Production continuity. In the event of a shortage with your primary supplier, a qualified alternative source allows you to keep the line running without stoppages or emergency surcharges.

Negotiating leverage. Having a credible alternative gives you real bargaining power on price and lead times with your usual supplier.

Cost reduction. Asian manufacturers of discrete, analog or power management components often offer direct equivalents (drop-in replacements) to major brands — TI, NXP, Analog Devices — at significantly lower prices, without compromising on quality.

Geopolitical resilience. A tariff change can make a key supplier unviable or force it to cut production, creating a cascade effect well beyond direct suppliers. Diversifying your sources limits this exposure.

Our Role at ARTRONIK COMPONENTS

We work directly as representatives and agents for a carefully selected panel of manufacturers offering equivalents to the major brands on the market. This positioning allows us to act quickly, without the constraints of exclusive agreements, to offer you qualified alternatives at the right time.

The market is not anticipating a widespread general shortage like 2021. But forecasts point to a series of acute, targeted shortages in specific component categories. It is precisely in these situations that having anticipated — and qualified — a secondary source makes all the difference between a production stoppage and business continuity.

Do you have a BOM to analyse, or a component that has been difficult to source? Contact us: we will get back to you within 24 hours.

Sources: Deloitte Semiconductor Industry Outlook 2026 · Sourceability Lead Time Reports Q3/Q4 2025 & Q1 2026 · VSE Electronics Supply Chain Outlook 2026 · Suntsu Electronics · 7setronic · Baker McKenzie · Ivalua · Supply Chain Dive

A Measure Rooted in National Security

The justification put forward by the Trump administration is unambiguous: according to the presidential proclamation, the United States manufactures only about 10% of the chips it needs domestically, making it heavily dependent on foreign supply chains — a situation described as a “significant economic and national security risk” for the country.

This is not a new observation. For several years, America’s dependence on Asian foundries — particularly Taiwanese ones — has fueled a strategic debate combining industrial sovereignty and technological competitiveness. Major American companies such as Nvidia, AMD, and Intel design their chips in the United States but have them manufactured abroad, primarily by Taiwanese giant TSMC. It is precisely this model that the new measure seeks to challenge.

The decision concludes a nine-month investigation conducted by the Office of the United States Trade Representative (USTR), Jamieson Greer — the same type of mechanism already used to impose tariffs on steel, aluminum, automobiles, and pharmaceuticals.

In Practice, Who Is Affected?

The 25% tariff applies to semiconductors imported into the United States with the intention of re-exporting them to their destination country. President Trump himself summed up the principle: “We allow them to export these chips, but the United States receives 25% of their value.”

Among the components directly targeted are advanced processors for artificial intelligence and high-performance computing — such as Nvidia’s H200 chips.

What Is Exempted

The proclamation does, however, provide significant exemptions. Semiconductors imported to:

• support the development of the American technology supply chain,
• power American data centers,
• serve start-ups, civilian industrial applications, and public sector uses,

…are not subject to these duties. This granularity reflects a desire to protect domestic innovation while concentrating pressure on segments deemed strategic.

A First Step, With More to Come

The measure is explicitly presented as phase 1. Washington has announced that higher duties on chip imports and their derivatives could be imposed “in the near future,” suggesting a broader second phase is in preparation.

This prospect creates significant uncertainty for the entire industry: manufacturers, distributors, equipment makers, and end buyers must now factor in scenarios of potentially wider taxation.

The Impact on Global Supply Chains

For players in the electronics sector, the logistical and commercial implications are immediate.

For Asian manufacturers, the measure increases the cost of transiting through the United States and complicates export routes to third-party markets. Companies like ASML have already indicated they are working with their supply chain and customers to “limit the impact as much as possible.”

For distributors and importers, the need to revise logistics flows is pressing: transit routes that avoid American soil will become more attractive, at the cost of sometimes complex reorganization.

For OEMs and buyers, particularly in the automotive, industrial, or consumer electronics sectors, rising component costs are a reality to be built into budgets and contracts currently under renegotiation.

More structurally, this decision accelerates thinking around the geographic diversification of production sites and the trade-off between cost, supply security, and regulatory compliance — a trend already underway since the shortages of 2021–2022.

Pressure on Industry to Reshore

The administration’s message is clear: manufacture in the United States and avoid the tariffs. Apple notably announced at the start of the week a $100 billion investment in its American production chain — a decision Trump hailed as the model to follow.

For other players, the equation is more complex. Building or relocating semiconductor manufacturing capacity takes years and requires billions of dollars. Tariff policy therefore acts more as a long-term strategic signal than as a short-term fix to current dependencies.

Key Takeaways for Your Procurement Watch

If you work in procurement, supply chain, or technical management at an industrial or electronics company, here are the risk factors to integrate now:

1. Map your flows: identify whether your components transit through the United States before delivery to Europe or elsewhere.
2. Anticipate tariff pass-through: suppliers exposed to this tax may pass it on to their pricing in the coming weeks.
3. Monitor phase 2: an extension of tariffs to other component categories is officially under consideration.
4. Strengthen supplier diversification: concentration on a single manufacturer or geographic area carries increased risk in this environment.

Sources: Boursorama / Reuters (January 15, 2026), Usine Digitale (January 15, 2026), IT Social (January 16, 2026), La Presse / AP (January 14, 2026), Electroniques.biz (January 15, 2026).

Before diving into the product itself, it is worth understanding what the IP68 rating really represents — because not all “waterproof” claims are equal.

The IP (Ingress Protection) rating system is defined by the international standard IEC 60529. It uses two digits: the first indicates protection against solid particles (dust), the second against liquids. The digit 6 means total dust-tightness — no ingress whatsoever. The digit 8 is the highest level of liquid protection, meaning the device can withstand continuous immersion in water beyond one metre depth, for a duration specified by the manufacturer.

In practice, IP68 is the most demanding rating an electronic component can carry for environmental protection. For RF connectors deployed in outdoor infrastructure — where they may be exposed to rain, flooding, condensation, pressurised cleaning, or permanent outdoor installation — IP68 is not a luxury. It is a necessity.

Why Standard RF Connectors Fail Outdoors

A standard SMA or BNC connector, perfectly adequate for a laboratory bench or an indoor rack, is not designed to survive prolonged outdoor exposure. The failure modes are well documented: moisture ingress causes oxidation of the contact surfaces, which increases insertion loss and degrades signal quality progressively. UV radiation degrades the dielectric and outer materials. Temperature cycling — from winter lows to summer highs — causes repeated mechanical stress at the interface. Dust and particulate contamination accelerates wear on the mating surfaces.

The consequences are not always visible until the installation fails: a base station antenna that loses sensitivity, a smart meter that drops its RF link, an industrial monitoring system that delivers corrupted data. By then, the cost of a field intervention to replace a connector that costs a few euros has grown to many multiples of that figure.

Specifying IP68-rated RF connectors from the outset eliminates this failure mode entirely.

EnterTec’s IP68 Waterproof Series: Technical Overview

EnterTec Technology Inc., established in 1997 in Taipei’s Tucheng Industrial Zone, developed its IP68 Waterproof RF series specifically to address high-frequency signal transmission in harsh environments. The design principle is straightforward: the IP68 rating is achieved only when the male and female devices are mated together correctly, forming a complete sealed assembly. This means the waterproof function is a system property of the connector pair — not simply a property of either half in isolation.

Once mated, the assembly provides:

• Full protection against dust ingress — IP6X rating, no particle penetration under any conditions.

• Continuous immersion resistance — IP-X8 rating, capable of operating underwater for extended periods.

• UV resistance — anti-UV materials and coatings selected to withstand prolonged solar exposure without degradation of mechanical or electrical properties. This is specifically relevant for outdoor installations in southern Europe, rooftop infrastructure, and any application without shading.

• Extreme temperature tolerance — stable performance across the wide temperature differentials characteristic of European climates, from Scandinavian winters to Mediterranean summers.

• Resistance to acid and alkali corrosion — relevant for industrial environments, coastal installations, and any deployment near chemical processes or marine atmospheres.

• Maintained signal integrity — the sealing technology does not compromise RF performance. High-frequency transmission quality remains stable under all environmental conditions.

All products in the series meet RoHS, REACH, PFOS, PFOA, ODS and IMDS certifications, ensuring full compliance with European environmental regulations without any additional qualification process.

Two Configurations: Screw Type and Quick Type

EnterTec offers the IP68 series in two distinct mechanical configurations, each optimised for a different deployment scenario.

Screw Type — for permanent, high-security installations

The Screw Type is designed for panel-mount systems where the connector is installed once and expected to remain in service for years without intervention. The threaded coupling mechanism provides maximum mechanical retention, ensuring the mated pair cannot separate due to vibration, mechanical shock, or accidental contact. This configuration is the right choice for fixed infrastructure: antenna mast connections, energy metering enclosures, base station installations, industrial control panels, and any application where field access is infrequent and long-term reliability is the primary concern.

Interface options: SMA and SMB Impedance: 50 Ohm and 75 Ohm Compatible cables: 0.81mm, 1.13mm, 1.32mm, 1.37mm, 1.48mm mini coaxial, and RG series (RG-174, RG-316, RG-178), as well as LMR and CFD series (LMR-100, LMR-195, LMR-200, LMR-240, CFD-100, CFD-195, CFD-200, CFD-240).

Quick Type — for field-serviceable and modular deployments

The Quick Type provides the same IP68 environmental protection with a push-pull or snap-lock coupling mechanism that allows fast, tool-free mating and unmating in the field. This is the configuration of choice for installations that require regular maintenance access, modular system architectures, mobile or temporary deployments, and any application where technician time in the field is a cost driver.

Interface: SMA Impedance: 50 Ohm and 75 Ohm Compatible cables: same range as the Screw Type — from miniature 0.81mm coaxial through to LMR-240 and CFD-240.

Applications: Where IP68 RF Connectors Are Deployed

The range of applications for IP68 RF connectivity has expanded significantly with the growth of outdoor electronic infrastructure across Europe. The main deployment contexts include:

• 5G and telecom infrastructure — small cells, distributed antenna systems, and base station antenna connections installed in outdoor cabinets, on building facades, street furniture, and rooftops. Signal quality and long-term reliability are non-negotiable in these installations.

• Smart metering and utilities — water level monitoring systems, electricity and gas meters with wireless connectivity, and pollution prevention monitoring networks. These installations are permanently outdoor, often in difficult-to-access locations, and expected to operate for 10 to 15 years without intervention.

• Renewable energy — power transmission and monitoring in wind and solar installations, where RF links connect sensors, monitoring equipment, and communication gateways in fully exposed outdoor environments.

Industrial IoT and automation — outdoor monitoring and testing programmes in manufacturing, logistics, and infrastructure management. Harsh industrial environments combine dust, moisture, and chemical exposure in ways that make IP68 the minimum acceptable standard.

LED and broadband infrastructure — outdoor LED lighting systems with wireless control, and high-speed broadband infrastructure integration including outdoor cable runs and junction points.

Wildlife and environmental monitoring — tracking and monitoring systems deployed in natural environments, where the connector must function reliably without any maintenance access for extended periods.

EnterTec as a Secondary Source: The Supply Chain Argument

European procurement teams have learned, through repeated supply chain disruptions since 2020, that single-source dependency on major Western connector brands is a structural risk. Amphenol, Telegärtner, Radiall, and Huber+Suhner produce excellent products — but lead times can extend to 20 or 30 weeks during demand peaks, and minimum order quantities can be prohibitive for mid-volume projects.

EnterTec offers a technically credible alternative: 27 years of manufacturing experience, full European regulatory compliance, flexible custom manufacturing capability for non-standard cable assemblies and configurations, and competitive lead times from their Tucheng facility. For distributors whose value proposition is solving their customers’ supply chain problems, EnterTec represents exactly the kind of qualified secondary source that transforms a procurement crisis into a manageable situation.

Request a Quote

If you are sourcing IP68 waterproof RF connectors — whether for a specific project or to qualify a secondary source — fill in the form below and we will respond within 24 hours with product availability, technical specifications, and pricing.

1. The 2024 Review: A Painful “Reset”

To understand where the sector stands today, we need to look back at what 2024 actually was: a year of painful correction. After the excessive orders placed in the panic of the 2022-2023 shortages, manufacturers spent most of the year working through surplus inventory. Nick Wood, Sales Director at Insight SiP, summed up the situation well at the start of 2024: “2024 will be a reset year, with largely stable revenues for many suppliers as the post-pandemic supply chain effects dissipate.” (Lembarque.com, February 2024)

The numbers confirm this diagnosis. In France, Acsiel’s Q1 2024 barometer recorded a 4% decline in the components and consumables index compared to the previous quarter — a 13% drop year-on-year. Semiconductors, passive components, and connectors all dragged the index down. A weak construction sector, the slowdown in electric vehicle uptake (with anticipated volumes slow to materialise), and fierce Chinese competition in certain segments made the picture even grimmer. (Acsiel / VIPress.net, July 2024)

On the European majors front, signals were equally negative: STMicroelectronics anticipated a 5.2% decline in its median revenue for 2024, while Infineon projected an 11% contraction in Q1. (ChannelNews, February 2024)

Yet at the global level, the overall picture is less bleak. Every single month of 2024, the semiconductor industry recorded double-digit year-on-year sales growth. In January 2024, global sales reached $47.6 billion, up 15.2% from January 2023, according to the Semiconductor Industry Association (SIA). (Groupe GA / IC-Golden.com, January 2025)

2. The Engine of Recovery: Artificial Intelligence

If one segment is pulling the entire industry upward, it is unquestionably AI chips. Demand from hyperscalers (Microsoft, Google, Amazon, Meta) equipping their data centers has continued to accelerate, propelling NVIDIA to the status of the world’s most sought-after stock. Foxconn CEO Young Liu stated early in 2024 that he expected “the AI chip shortage to continue through 2024 due to limited server chip production capacity.” (ChannelNews, February 2024)

This dynamic is creating a rift within the market itself: on one side, a persistent shortage and sustained prices for high-end GPUs and AI chips; on the other, overcapacity and margin pressure in more mature segments (passive components, consumer microcontrollers, traditional automotive components).

Gartner forecast a 16.8% rebound in global semiconductor revenues to reach $624 billion in 2024 — growth driven largely by this AI boom. (ChannelNews, December 2023)

For 2025, the outlook is positive but mixed. The WSTS (World Semiconductor Trade Statistics) projects 12.5% growth in the global market, reaching $687 billion, driven by memory and logic chips. In Europe, expected growth remains more modest — single digits — while the Americas and Asia-Pacific should post significantly stronger rates. (Groupe GA / IC-Golden.com, January 2025; Kitron / Electroniques.biz, June 2024)

3. New Geopolitical Dynamics: From Shortage to Sovereignty

The harsh lesson of 2021-2022 was clear: in the world of electronic components, geographic dependency is a systemic risk. The vast majority of advanced chip production is concentrated in Taiwan, at TSMC, which manufactures most of the cutting-edge semiconductors for Apple, NVIDIA, and AMD. Tensions between Beijing and Taipei remain high, and this concentration is alarming governments and industry players alike.

The response has been political and massive:

• United States: The CHIPS and Science Act of 2022 mobilised $52 billion in subsidies to reshore manufacturing on American soil. From April 2024 onward, the first concrete tranches were announced: $6.6 billion for TSMC (Arizona), $1.375 billion for GlobalFoundries (New York). However, manufacturing in the US costs 3 to 4 times more than in Taiwan, and a shortage of skilled labour remains a major obstacle. (Le Monde Informatique, December 2023; Investing.com, April 2024)
• Europe: The European Chips Act, backed by €44 billion, aims to bring Europe’s share of global chip production to 20% by 2030. An ambitious target, given that the continent is starting from a very low base. By September 2024, some industry players were already calling for a “Chips Act 2.0,” noting that the first version had mainly served to “highlight the problems” without yet solving them. (Generation-NT.com, September 2024)
• China: Beijing is investing heavily in local factories to achieve technological self-sufficiency. Over the past three years, its share of global chip manufacturing has increased by nearly 50%, reaching approximately 18% of global supply. (Le Monde Informatique, December 2023) Meanwhile, US export restrictions on the most advanced AI chips to China have created a paradoxical dynamic: Chinese tech giants (Alibaba, ByteDance, Tencent) continue to eagerly purchase NVIDIA chips adapted to export rules (such as the H20), lacking competitive local alternatives in the short term.

4. Growth Segments and Segments Under Pressure

The electronic components market is not monolithic. In 2025, some segments are clearly driving growth while others are struggling to emerge from the cyclical trough.

High-growth segments:

• AI chips and data centers: driven by massive hyperscaler investments.
• Automotive electronics (ADAS, EVs): electric vehicles are incorporating ever more semiconductors (over 1,000 power modules per vehicle on average). Demand for SiC (silicon carbide) components is surging for energy management systems. (Mordor Intelligence / Marketgrowthreports.com)
• 5G and connectivity: 5G infrastructure rollouts are sustaining strong demand for high-frequency RF components.
• IoT and smart home: more than 20 billion IoT endpoints expected to be deployed globally, each requiring multiple components. (Global Growth Insights)

Segments under pressure:

• Passive components and connectors: overproduction, Chinese competition, margin pressure.
• Industrial and building electronics: weak conditions in the residential construction sector are weighing on home automation.
• PCBs (printed circuit boards): after a 15% production decline in 2023, the recovery is gradual. Capacity is abundant in China, while Europe and the US are focused on ramping up their defence industry output. (Kitron / Electroniques.biz, June 2024)

5. Persistent Structural Challenges

Despite the rebound, several structural vulnerabilities continue to weigh on the industry:

Cyclical volatility. The semiconductor industry remains deeply cyclical. Kitron, a specialist subcontractor, puts it bluntly: “component availability has greatly improved, but the market remains very difficult and almost all other factors affecting prices are moving in the wrong direction.” (Electroniques.biz, June 2024) The risk of a new mini supply crisis in the event of a sudden demand rebound remains real.

Lack of visibility. The prolonged inventory correction has generated a deficit of visibility on long-term orders, making forecasting highly challenging for component manufacturers. Lead times can lengthen “very quickly when global demand growth absorbs available inventory.” (Kitron)

Raw material price pressure. French manufacturers are facing rising prices for copper, tin, and gold, while at times being forced to cut their selling prices to keep factories running — a particularly painful squeeze in the passives segment. (Acsiel / VIPress.net, July 2024)

Skills shortage. Recruitment difficulties span all profiles — technicians, operators, engineers — and represent one of the key constraints on ramping up production, including for the most ambitious reshoring projects. TSMC in Arizona experienced this firsthand, pushing back the opening of its second plant from 2024 to 2025. (Le Monde Informatique, December 2023)

6. Outlook: A Market in Deep Restructuring

By 2032, the global electronic components market could reach $847 billion (up from around $394 billion in 2024), according to Fortune Business Insights — a near-doubling in less than a decade. Asia-Pacific is expected to maintain its dominance with around 37% market share.

But beyond the numbers, a structural reshaping is underway. Global supply chains, once optimised purely for cost, are reorganising around resilience and sovereignty. Governments have become direct actors in the industry. Geopolitics has entered the boardrooms of chip manufacturers. And artificial intelligence, by creating an almost insatiable demand for computing power, has reshuffled the deck among all players.

For European and French players, the challenge is twofold: participating in this rebound while building an industrial base that is less dependent on Asian supply. That is the challenge underpinning the European Chips Act, as well as champions like STMicroelectronics and Soitec, which are developing advanced technologies for the automotive and space markets. (Major Prépa, November 2024)

Summary

Sources

• Semiconductor Industry Association (SIA) — monthly global sales data: semiconductors.org
• WSTS (World Semiconductor Trade Statistics) — 2025 forecasts: wsts.org
• Gartner — semiconductor market forecast 2024 (ChannelNews, December 2023): channelnews.fr
• Acsiel — Electronics barometer Q1 2024 (VIPress.net, July 2024): vipress.net
• Kitron — Electronic components market watch (Electroniques.biz, June 2024): electroniques.biz
• Nick Wood / Insight SiP — Industry outlook 2024 (Lembarque.com, February 2024): lembarque.com
• Groupe GA / IC-Golden.com — Electronic components industry outlook 2025 (January 2025): ic-golden.com
• Fortune Business Insights — Global electronic components market size: fortunebusinessinsights.com
• Le Monde Informatique — CHIPS Act: status report (December 2023): lemondeinformatique.fr
• Generation-NT.com — Chips Act 2.0 and European strategy (September 2024): generation-nt.com
• ChannelNews — Semiconductor rebound, AI chip shortage (February 2024): channelnews.fr
• Major Prépa — Semiconductors 2025, geopolitical stakes (November 2024): major-prepa.com
• Mordor Intelligence — Power electronics market: mordorintelligence.com

📈 Record Rebound in Semiconductor Sales

The global semiconductor market recorded sales of $166 billion in Q3 2024, an increase of +23.2% compared to Q3 2023 and +10.7% more than Q2 2024 — the strongest quarter-to-quarter growth rate since 2016. In September 2024, monthly sales reached $55.3 billion, a historic monthly record.

“The global semiconductor market continued to grow during the third quarter of 2024, with quarter-to-quarter sales increasing at the largest rate since 2016.” — John Neuffer, President and CEO of the SIA

Source: Semiconductor Industry Association (SIA) / WSTS 🔗 https://www.semiconductors.org/global-semiconductor-sales-increase-23-2-in-q3-2024-compared-to-q3-2023-quarter-to-quarter-sales-up-10-7/

🏭 Recovery in Global Semiconductor Manufacturing

According to the SEMI SMM report, Q3 2024 marks the first time in two years that all key semiconductor manufacturing indicators have progressed simultaneously on a quarter-to-quarter basis. IC sales surged +27% year-on-year in Q2 2024 and are expected to rise a further +29% in Q3 2024, surpassing the record levels of 2021 driven by AI-related demand. Memory capital expenditure (CapEx) jumped +34% compared to Q2, fuelled by demand for HBM (High Bandwidth Memory). Installed foundry and logic fab capacity grew +2.0% in Q3 2024.

Source: SEMI — Global Semiconductor Manufacturing Industry Q2 2024 Report 🔗 https://www.semi.org/en/semi-press-releases/global-semiconductor-manufacturing-industry-strengthens-in-q2-2024-semi-reports

🔴 Intel: 15,000 Layoffs and $1.6 Billion Net Loss

In August 2024, Intel announced the elimination of approximately 15,000 positions, representing 15% of its global workforce, following disappointing Q2 results: revenue of $12.8 billion, down 1% year-on-year, and a net loss of $1.61 billion. The company acknowledged its lag in AI against Nvidia and AMD. Intel recorded $2.8 billion in restructuring charges in Q3 2024, with a total of $3.0 billion expected across the full restructuring programme.

Sources:

• Intel Form 8-K SEC Filing Q3 2024 🔗 https://www.sec.gov/Archives/edgar/data/0000050863/000005086324000147/intc-20241028.htm
• Fast Company — Intel layoffs and Q2 earnings, August 2024 🔗 https://www.fastcompany.com/91166920/why-are-ai-chip-stocks-down-nvidia-tsmc-arm-intel-layoffs-q2-2024-earnings
• Tom’s Hardware — Intel layoffs announcement, July 2024 🔗 https://www.tomshardware.com/tech-industry/big-tech/intel-allegedly-plans-imminent-lay-off-of-thousands-of-employees-report

🤖 Nvidia Blackwell: Production Ramp-Up, Insatiable Demand

Announced at GTC in March 2024, Nvidia’s new Blackwell architecture includes the B100, B200 accelerators and the GB200 Grace Blackwell Superchip. In Q3 2024, Nvidia confirmed it had shipped customer samples of Blackwell in Q2 and that mass production was scheduled to begin in Q4 2024. Meanwhile, demand for Hopper GPUs (H100) remained exceptionally strong, with Data Center revenue up +154% year-on-year and +16% compared to Q2 2024.

Sources:

• Nvidia Form 8-K SEC Filing Q2 FY2025 🔗 https://www.sec.gov/Archives/edgar/data/0001045810/000104581024000262/q2fy25cfocommentary.htm
• Data Center Knowledge — Nvidia Blackwell GPU launch, GTC 2024 🔗 https://www.datacenterknowledge.com/data-center-chips/nvidia-launches-next-generation-blackwell-gpus-amid-ai-arms-race-

🌐 A Two-Speed Recovery: AI Strong, Industrial and Automotive Lagging

AI, smartphones and PCs are driving the recovery, while the industrial and automotive segments are showing a significant lag. S&P Global’s Manufacturing PMI New Orders Index showed growth for the first time since March 2023 in May 2024, reaching 50.7 — an encouraging but fragile signal. Manufacturers with high industrial exposure, such as Texas Instruments and STMicroelectronics, recorded revenue declines in these segments during the second half of 2024.

Source: S&P Global Market Intelligence — Semiconductor Supply Chain Q3 2024 Outlook 🔗 https://spglobal.com/marketintelligence/en/mi/research-analysis/semiconductor-supply-chain-q3-2024-outlook.html

🇨🇳 Geopolitical Tensions: Tightened US Restrictions, Chinese Response

Washington tightened its export controls on advanced chips destined for China during the summer of 2024. These restrictions are directly impacting semiconductor supply chains, while China continues to advance its domestic chip production capabilities. China nonetheless remains the fastest-growing region for installed manufacturing capacity, even if fab utilisation rates remain subdued. Approximately 30% of semiconductor manufacturers’ revenues come from the Chinese market, making these restrictions particularly sensitive for the industry.

Source: S&P Global Market Intelligence — Semiconductor Supply Chain Q3 2024 Outlook 🔗 https://spglobal.com/marketintelligence/en/mi/research-analysis/semiconductor-supply-chain-q3-2024-outlook.html

📦 End of Overstocking, but Uneven Recovery

After several quarters of inventory digestion, IC stock levels recorded a 2.6% decline year-on-year in the first half of 2024 — a sign that the market is beginning to normalise. However, the correction is progressing more slowly than expected in the automotive and industrial sectors. Global average lead times have fallen back below 14 weeks (compared to more than 26 weeks at the peak), but pockets of tightness persist in AI-related components and power electronics for electric vehicles.

Source: SEMI — Global Semiconductor Manufacturing Industry Q2 2024 Report 🔗 https://www.semi.org/en/semi-press-releases/global-semiconductor-manufacturing-industry-strengthens-in-q2-2024-semi-reports

1. TSMC and the CHIPS Act: A Third Fab in Arizona (April 8, 2024)

On April 8, 2024, the U.S. Department of Commerce and TSMC Arizona signed a preliminary agreement for up to $6.6 billion in direct funding under the CHIPS and Science Act. The announcement came with a major headline: TSMC confirmed the construction of a third fab in Phoenix, bringing the total investment on the site to more than $65 billion — the largest foreign direct investment in a greenfield project in U.S. history.

The first fab will produce chips using 4nm process technology, the second will use 2nm — the most advanced ever manufactured in the United States — and the third will use 2nm or more advanced processes, with production scheduled before the end of the decade. In addition to the direct funding, the agreement proposed up to $5 billion in federal loans.

For component procurement professionals, this event is strategic on two levels: it will ultimately reduce the global industry’s dependence on a single geographic cluster in Asia, and it confirms that reshoring advanced semiconductor production is no longer wishful thinking — it is literally under construction.

Source: TSMC / U.S. Department of Commerce, official press release, April 8, 2024 — pr.tsmc.com · commerce.gov

2. Nvidia Shatters Records: $26 Billion in Revenue for Q1 (May 22, 2024)

On May 22, 2024, Nvidia released its results for the first quarter of fiscal year 2025 (ending late April 2024). The figures left the industry speechless: $26 billion in revenue, up 262% year-over-year and 18% from the previous quarter.

The Data Center segment, the engine of this growth, reached $22.6 billion on its own — a 427% increase year-over-year. Demand for the Hopper GPU platform, used for training and inference of large language models, continued to surge. Major cloud providers accounted for roughly 45% of Nvidia’s Data Center revenue that quarter. Nvidia also announced a ten-for-one stock split, effective June 7, 2024.

Jensen Huang, Nvidia’s CEO, told investors: “The next industrial revolution has begun.”

For the broader electronic components industry, these results confirmed an unavoidable reality: demand for AI chips and high-bandwidth memory (HBM) was creating a two-speed market — standard components trending toward normalisation on one side, and cutting-edge semiconductors under chronic supply pressure on the other.

Source: NVIDIA Corporation, Q1 FY2025 earnings press release, May 22, 2024 — investor.nvidia.com

3. The US-China Chip War Intensifies: New Export Restrictions

Throughout Q2 2024, geopolitical pressure on semiconductor supply chains continued to mount. U.S. export controls on advanced chips destined for China — first introduced in October 2022 and expanded in October 2023 — kept evolving, with new Chinese entities added to the restricted list and tightened licensing requirements for semiconductor manufacturing equipment.

These measures aimed to limit China’s access to the most advanced AI GPUs and the lithography tools needed to produce next-generation chips. Meanwhile, China was accelerating its push for technological self-sufficiency, with companies like Huawei and SMIC making progress on increasingly advanced process nodes despite the restrictions.

For procurement teams and supply chain managers, this dynamic carries direct implications: the gradual fragmentation of the global semiconductor market into two distinct ecosystems — one aligned with the United States, the other with China — is beginning to materialise in sourcing decisions, approved vendor lists, and qualification strategies.

Source: U.S. Bureau of Industry and Security (BIS) — regulatory developments 2023–2024; CSIS, The Limits of Chip Export Controls, 2024 — csis.org

What This Means for Your Component Procurement

These three events point to the same conclusion: the electronic components market is normalising on the surface, but restructuring at its core. Lead times are improving for standard references — but advanced semiconductors, HBM memory, and AI chips remain under structural pressure, with geopolitics capable of closing off supply access overnight.

At ARTRONIK COMPONENTS, we monitor these developments in real time to anticipate allocation cycles before they affect our customers. It is precisely why we continue to expand our network of certified manufacturing partners — to provide qualified alternatives when markets tighten.

How We Got Here

Cast your mind back to 2021. Automotive plants were shutting down for lack of a $2 chip. Consumer electronics manufacturers were air-freighting components at eye-watering costs. Distributors were quoting lead times in months, not weeks. Buyers were doubling and tripling their orders out of pure fear, which only made the shortage worse.

The root causes were well documented: a surge in consumer electronics demand during lockdowns, a simultaneous collapse and rebound in automotive production, a global shortage of wafer fabrication capacity, and a cascade of logistics disruptions — from port congestion to the Suez Canal blockage of 2021. The industry was caught flat-footed, and it took years of capital investment, capacity expansion and painful inventory correction to find its way back.

“After two years of severe constraints, lead times across most component categories have returned to levels broadly consistent with pre-pandemic norms, with average global figures now tracking below 14 weeks.”

— Industry consensus, distributor data, Q4 2023 / Q1 2024

What the Numbers Say

Supply chain tracking data available through early 2024 confirms that global average lead times have returned to approximately 14 weeks — down from a peak of over 26 weeks recorded at the height of the crisis in 2022. This represents a reduction of nearly 50% from the crisis peak.

The recovery has not been uniform across all product families:

Passive components (MLCCs, resistors, inductors) saw some of the most dramatic lead time improvements, having been among the most severely affected during the shortage. Supply has recovered substantially, though demand is beginning to move upward again — a dynamic worth monitoring closely.

Logic ICs and microcontrollers have also seen significant normalisation, with many standard references now available from stock at major distributors, reversing the desperate allocation environment of 2021–2022.

Power semiconductors (MOSFETs, IGBTs, diodes) remain somewhat tighter than other categories, sustained by structural demand from the electric vehicle and renewable energy sectors.

AI and high-performance computing chips are in a category of their own — demand from hyperscalers and AI accelerator manufacturers continues to outstrip supply for leading-edge devices, and this segment shows no sign of normalising.

The Inventory Correction Problem

Here is where the picture becomes more nuanced. The normalisation of lead times has come hand in hand with a significant build-up of inventory across the supply chain. During the shortage years, buyers — understandably — placed orders far in excess of their actual requirements, hedging against delays and allocation. Now that supply has caught up, those excess orders have translated into bloated warehouses.

Distributors are sitting on elevated stock levels. Many OEMs and contract manufacturers are working through component inventory that will take several more quarters to digest. This oversupply situation is exerting downward pressure on prices — good news for buyers in the short term, but a source of margin pressure for manufacturers and distributors.

The supply-demand imbalance is particularly visible in passive components, where supply growth has outpaced demand recovery since mid-2022. The risk of a new tightening cycle — not immediately, but potentially within the next 12 to 18 months — cannot be dismissed if demand continues to accelerate from current levels.

What This Means for Procurement Teams

The temptation, in a normalised market, is to relax. Lead times are manageable, prices are under control, stock is available. But the asymmetric nature of supply chain risk argues strongly against complacency. The journey from comfortable availability to acute shortage can be measured in weeks, while the recovery takes years.

Several factors could trigger a new tightening cycle in 2024:

Geopolitical risk remains elevated. Tensions between the US and China over semiconductor technology exports, the vulnerability of Taiwan-based foundries, and disruptions in global shipping lanes — including the Red Sea, where Houthi attacks are already diverting container traffic in early 2024 — represent live threats to supply continuity.

Structural demand acceleration in AI, electric vehicles and renewable energy is not cyclical. These sectors will increasingly compete for power semiconductors, high-speed memory and advanced packaging capacity.

Reshoring investments — TSMC in Arizona, Intel in Ohio and Germany, Samsung in Texas — are genuinely underway but will not deliver meaningful capacity relief before 2026 at the earliest. The industry remains heavily dependent on a concentrated group of Asian foundries in the meantime.

The Strategic Takeaway

The normalisation of lead times in early 2024 is unambiguously good news. For procurement teams, it restores flexibility and reduces emergency stock costs. For designers, it reopens access to components that were essentially unavailable for years.

But the structural vulnerabilities exposed by the 2020–2023 crisis have not disappeared. The companies that will navigate the next disruption best are those that use this window of relative calm to diversify their supplier base, invest in obsolescence monitoring, and build relationships with reliable, certified component partners rather than relying solely on the spot market.

At ARTRONIK COMPONENTS, this is precisely why we continue to expand our network of vetted manufacturing partners — ensuring that when the next cycle turns, our customers are protected.

Sources

• Susanne Retzlaff, IHS Markit / S&P Global — Electronic components lead time tracking reports, 2022–2023
• Supplyframe — Component Intelligence Reports, Q3–Q4 2023
• ECIA (Electronic Components Industry Association) — North America Electronic Components Sales Report, Q4 2023
• Bloomberg / Reuters — Red Sea shipping disruption coverage, January–February 2024
• TSMC, Intel, Samsung — Official announcements on US and European fab investments, 2022–2023
• Distributor earnings calls (Avnet, Arrow, TTI) — Inventory and demand commentary, Q3–Q4 2023