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Optimism about sales of electronic components has moderated in recent months, according to the ECIA, although demand remains high. The economy, inflation, and supply chain constraints have likely helped soften expectations.

It’s also possible that after six months of chip allocation, OEMs are realistic about how many parts they can expect to receive.

In March and April, optimism peaked in the monthly ECIA Component Sales Trends (ECST) survey. The index reached 157.7 in March, with any number above 100 indicating growth. The following four months showed a steady loss of speed. The index for July stood at 128.7.

In addition, survey respondents expect the index to decline further, with the outlook for August overall at 121.6. The decline in the index shows a sharp slowdown in growth expectations until the summer of 2021, according to Dale Ford, chief analyst at the ECIA.

The assessment of aggregate end-market demand reflected the outlook for demand for electronic components as it fell from an index of 159 in April to 128 in July. Given the lessening pressure on growth, one would expect the upward pressure on delivery times to be reduced, Ford said in a statement. Unfortunately, it is not the case.

Expectations for end-market demand peaked in April, according to the ECIA, with 60% of respondents saying month-over-month sales growth was “better.” Only 1% saw “worse”. Responses to the “better” survey dropped to 35% in July; 7% considered the market to be “worse”.

Concerns about the economy and emerging inflationary pressures could explain the change in sentiment in the index, Ford said. “Additionally, supply chain challenges are likely adding to concerns, as supply constraints in one category have a ripple effect on demand in other areas. Within individual market segments, computers and telecommunications network equipment saw the largest decline in positive sentiment. On the other hand, the avionics / military / space segment saw its expectations improve.

Data released by the industry’s largest distributors, Arrow Electronics Inc. and Avnet Inc., showed record growth in component sales in the second calendar quarter and continued high demand. After six months of shortage, however, customers can be more realistic about how many coins they can actually get.

“We were able to try to manage the expectations of our customers with those of our suppliers, so that everyone knows what’s coming up,” said Mike Long, CEO of Arrow, on a call with analysts. .

The semiconductor shortage is straining all US manufacturing sectors, according to the Institute for Supply Management. Demand remains robust – the ISM new orders index in July was 64.9; any number greater than 50 indicates expansion. Automakers have shut down some production lines and Apple has signaled that the chip shortage will impact iPhone and iPad sales.

“Everything is in demand, both old and new chips,” said Tim Fiore, chairman of the ISM Manufacturing Inquiry Committee. “It has an impact on anyone who has some level of electronics in their products. And it should not improve until 2022. “

It’s not just the end markets that feel constrained. Manufacturers and distributors of electronic components said their second quarter performance could have been better without the supply constraints.

On Intel’s earnings call, Intel Corp. CEO Patrick Gelsinger blamed supply shortages for limiting the chipmaker’s growth opportunities, saying the company “would have numbers more important in the second half of the year if we were not limited in the offer “.

Long told analysts that Arrow could ship an additional $ 1 billion in merchandise if it had a comparable level of inventory.

The pressure on semiconductor delivery times remains stubbornly high, with 79 of those polled expecting longer delivery times, Ford said. DRAM, NAND flash memory, and discrete semiconductors exhibit the highest delay pressure. The comparison between June and July delivery times shows a slight relief in the electromechanical, connector and passive segments.

Chip industry experts have said the chip shortage could last until 2023.