Supply Chain Dynamics
The electronic component supply chain is forecasted to undergo significant changes stepping into 2024, primarily influenced by the evolving tech landscape and shifting dynamics within Asia’s supply chain. The recent surge in generative AI has intensified the demand for high-performance computing (HPC) and AI server supplies. Consequently, cloud service providers are customizing their chips to enhance energy consumption and cost optimization. This trend will continue throughout 2024, with AI cloud capabilities maintaining a solid influence on capital expenditures.
The Evolving Tech Landscape
Notably, several tech giants are forging alliances with chipmakers to discover new opportunities in this booming sector. For instance, TSMC has worked closely with numerous cloud service companies to manufacture their specific components. This trend is expected to trigger a shift in the memory market from surplus to shortage.
The Memory Chip Market
The memory chip market experienced significant downturns in demand over the past year. The sales in this market dropped from 30 to 17 percent. However, the growing demand for server memory and the rising popularity of electric vehicles have spiked orders for optoelectronic semiconductors for sensing and application processors, hinting at a possible resurgence in this sector moving into next year.
Future Labor Shortages
Another area of concern is the potential labor shortage in the semiconductor industry. To mitigate this, companies are collaborating with education leaders to form the global Semiconductor Education Alliance (SEA). This initiative aims to share resources among companies to prevent future labor shortage disruptions.
Looking Into the New Year: Challenges and Opportunities
After an extended period of semiconductor shortage and escalating excess, it’s high time the global electronic supply chain experienced steady growth. The generative AI boom, which has sparked semiconductor sales and tech sector innovation, is expected to shape the industry’s trajectory over the next five years. However, the ongoing export restrictions between the U.S. and China could disrupt the global semiconductor supply chain landscape.
As we move into 2024, monitoring these market trends will be essential for OEMs, CMs, and EMS providers. Keep the changing supply chain landscape from catching you off guard. Be proactive and prepare for 2024’s new supply chain landscape with PXC today. Connect with our experienced and dedicated management team of experts to ensure you’re ready to navigate the future supply chain successfully. With a combined industry knowledge of 200 years and client support managers with unique training in product and fulfillment, Pacific Component Xchange, Inc. is one of the oldest and largest hybrid distributors of electronic components in the marketplace. We source your hard-to-find components at PCX – if we don’t have them, we CAN find them.