As we approach the end of 2023, it's clear that electronic component sales sentiment has stalled in trying to move into positive territory by the end of the year. The index showed a healthy improvement between May and August 2023, but it has been fluctuating between 83 and 90 from August to December. The monthly survey** from July to October showed an improvement in the headline index between 94 and 100 in the coming month, but when it comes to gauging actual sentiment, the results were disappointing. The November survey showed that the overall outlook index for December was 833, which is only 05 points, this seems to be a grim reality. Efforts to push electronic component sales sentiment above the 100 mark will continue into 2024
The outlook for sales confidence in the three major component categories in December was at 825 to 841. Fluctuations in a narrow range. The outlook for connectors and memory ICs is the most promising. However, sales confidence expectations in these strongest segments have fallen below 90. Between August and October, sales confidence scores in 2 or 3 subcategories ranged from 95 to 102, which brings optimism to the broader improvement over the next month. Unfortunately, no segment has been able to maintain positive momentum. From May 2023, the overall sales sentiment index began to improve, with an average overall sales sentiment score of 82 through the December outlook9, which is roughly equal to the November and December outlook scores. Overall end-market sales confidence in both the November actual and December outlook is just above 80.
The results of the fourth quarter of 2023 are very encouraging compared to the monthly survey in November. A solid improvement is expected in the first quarter of 2024, with the number of participants reporting positive sales growth expectations increasing from 14% to 23%. Most participants expect growth of more than 3% in the first quarter of 2024. On the other hand, the proportion of participants reporting negative growth decreased from 27% in the fourth quarter to 18% in the first quarter. The largest percentage of participants reported flat growth in both the fourth and first quarters. Fourth-quarter results also improved compared to the previous third-quarter survey, with the percentage of reporting negative expectations down 9% and the percentage expecting positive outcomes down just 6%. The net score of positive and negative sales sentiment towards the outlook for the first quarter of 2024 was the most positive since the second quarter of 2022.
A major shift was the disappearance of the sales confidence gap between upstream manufacturer representatives and downstream manufacturers and distributors in the November actual sales data and the December outlook survey. This was one of the most encouraging developments in the November survey. The chasm has been there for eight months. Given that manufacturer representatives can be seen as being on the front lines of sales, their prospects for continuous improvement give reason for more optimism.
The overall end-market index edged up 18 o'clock. It is expected to stabilize at this level in December. Unsurprisingly, avionics Jun Aerospace continues to score high scores above 100, followed by medical, automotive, and industrial with scores between 87 and 95. Mobile**, consumer electronics, and computer scores continue to hover around 70. With the exception of computers and consumer electronics, scores are expected to weaken in all end-market categories in December.
The trend in product lead times has reversed from the trend of several months, with a slight increase in lead times reported overall. Survey participants who reported shorter lead times fell from 39% in October to 25% in November. Reports of increased lead times increased from 3% to 7%. In November, there was a significant increase in the number of reports of increased DRAM and flash lead times. While the decrease in the number of reported lead time increases is a positive development, after a period of extremely high lead times, the share of increased lead time reports is increasing, and the number of reduced lead time reports can be seen as an indicator of improved demand growth for electronic components.
About Sanquan Technology.
Founded in 2000, Shenzhen Sanquan Asia-Pacific Technology Co., Ltd. is the leading integrated circuit IC business in Asia, with more than 200 product lines, and has been selected by many customers as a reliable supplier of integrated circuit IC and electronic components. Sanquan Technology supplies HBM to the world's three major memory manufacturers, SK hynix, Micron and Samsung. The excellent Yangtze River Storage in China is also its customer. From this, it can be seen that the product competitiveness of Sanquan Technology. In addition, the brands distributed by Sanquan Technology include Richtek, ON, Microchip, TI and so on.