In 2024, the global electronics components industry continued its inventory reduction efforts, but progress was slower than anticipated, leading to ongoing supply chain oscillations. Here’s a detailed breakdown of the situation:

1. Inventory Depletion Trends

- Overall Trend: The global electronics components industry saw a continuation of inventory reduction in 2024, but at a slower pace than expected. Some categories faced more severe inventory levels than anticipated. Although lead times for various chip categories have largely normalized, inventory overhangs continue to impact supply chain stability.

- End-Market Demand Divergence: Orders for chips in data centers, consumer electronics, new energy, and medical devices grew, while orders in automotive and industrial sectors underperformed expectations. Communication orders showed no significant improvement.

2. Order Dynamics Across Segments

- Data Centers & Consumer Electronics: Strong demand in data centers and consumer electronics drove chip order growth. The rapid development of AI technology also accelerated the refresh cycles of smartphones, PCs, and wearables, further boosting chip demand.

- Automotive & Industrial: Order recovery in automotive and industrial sectors was slower than expected. Automotive MCU chips saw both volume and price declines, with high inventory levels, reflecting ongoing challenges in demand recovery.

- Communications: Overall communication orders declined and showed no significant improvement.

3. Supply Chain Performance

- Upstream: Core equipment demand remained stable, with some improvement in material orders.

- Midstream: Capacity utilization in manufacturing and packaging/testing segments was mixed. While some areas faced overcapacity, AI-related chip capacity remained tight.

- Downstream: Original equipment manufacturers and distributor orders grew steadily, but automotive and industrial orders were volatile.

4. Market Trends and Outlook

- Global Semiconductor Market: Global semiconductor sales rebounded strongly in 2024, reaching $626.87 billion, up 19% year-over-year. Looking ahead to 2025, despite structural divergences, the overall growth trend remains stable, with the industry gradually entering an upcycle.

- China Market: China’s semiconductor sales are expected to exceed $170 billion in 2024, with chip design sales reaching $64.604 billion, up 17% year-over-year. China excelled in communication and consumer electronics chips but remains focused on mid-to-low-end products.

5. Impact of Inventory Overhangs

- Price Fluctuations: Inventory overhangs led to low prices for some chips, such as automotive-related MOSFETs, IGBTs, and PMICs, which saw both volume and price declines.

- Supply Chain Oscillations: Slow inventory reduction increased coordination challenges across supply chain segments, with some companies facing dual pressures of insufficient orders and excess inventory.

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2024 was marked by slow inventory depletion in the global electronics components industry, with underwhelming order recovery in automotive and industrial sectors, while data centers and consumer electronics saw strong demand. This divergence significantly impacted supply chain stability, but the overall market is gradually recovering.