General Economic & Global Supply Chain Conditions

The market is now shaped by the continuation of structural trends tracked in the second half of 2025 – growing component demand, depleted distribution inventories, AI-driven capacity constraints and rising commodity prices – compounded by the outbreak of the US-Israel war on Iran and the resulting closure of the Strait of Hormuz, with direct consequences for energy prices, freight costs and petrochemical raw material supply chains.

Economic outlook

The IMF World Economic Outlook Update (January 2026) projected global growth at 3.3% for 2026, a slight upward revision since October 2025. As of April 2026 the IMF has announced a downgrade to this forecast, driven by the Middle East conflict and the associated energy price shock. IMF Managing Director Georgieva stated: "Had it not been for this shock, we would have been upgrading global growth. But now, even our most hopeful scenario involves a growth downgrade."

Key headwinds now include sharply higher energy prices, renewed US inflation (CPI at 3.3%), Federal Reserve rate uncertainty, and an additional drag on the European industrial economy from the energy cost shock.

Geopolitical Tensions

The World Uncertainty Index remains near record high. The “black swan” scenario described in our previous alert has, to a significant extent, already materialised: at the end of February 2026, a US-Israel military operation against Iran commenced. Iran closed the Strait of Hormuz, where approximately 20% of global oil trade normally transits. Consequences are immediate and severe: sharply higher energy prices, elevated freight surcharges and upward pressure on petrochemical-derived raw materials – all driving additional cost increases component markets, on top of the structural trends already in play.

Supply Chain Volatility

If we look at the GEP Global Supply Chain Volatility Index*, the April 2026 release (covering March data) shows a dramatic and abrupt deterioration: the index soared from 0.09 in February to 0.57 in March – its highest level since January 2023, and a clear signal that supply chain capacity is now being meaningfully stretched.

The key findings from the March 2026 data are as follows:

• Item shortages rose to a three-year high, confirming genuine supply chain bottlenecks, rather then only temporary demand surges.
• Global manufacturers, particularly in Europe, increased safety stockpiling aggressively, further tightening availability.
• Transport costs surged to a four-year peak, adding further pressure to supply chains.
• The most severe shortages affected polymers, PVC, rubber, and energy-intensive metals such as aluminium and copper.

For context: February 2026 had shown worldwide procurement activity rising at its strongest pace in nearly four years – a broad cyclical recovery across Asia, North America and Europe prior to the outbreak of the conflict. The March reversal was sharp and conflict-driven.

Electronics Component Markets – Reports

If we look into the ECIA Electronic Component Sales Trends (ECST) survey, the report has delivered a series of exceptionally strong readings in Q1 2026. The overall index hit 138.0 in January – the highest reading in 4.5 years, rising to 143.4 in February and sustaining above-100 levels across all three major segments (semiconductors, passives, electromechanical) in March. Distributor sentiment reached 160 – the highest optimism reading in years. ECIA specifically flagged a severe supply-demand mismatch in advanced memory ICs as the greatest near-term risk, alongside little to no reports of decreasing lead times across semiconductors and electromechanical components throughout Q1 2026.

Pricing

The pricing environment has fundamentally changed since Q4 2025. What we observe today is no longer a typical annual price adjustment cycle.

Following, positive demand sentiments we observe a significant surge in the number of price increase communications from component manufacturers, diverging from trends observed in last years. Previously, price corrections occurred on average once a year and typically ranged from 1–2% up to 5% in stable years. Only in exceptional cases, when demand for a specific component surged sharply, increases of a higher magnitude were seen. As an example, from Texas Instruments alone we have already received notification of a third consecutive price increase since September 2025. These are not changes of a few percent — in the case of some components, the first increase was approximately 15%, the next 30%, and the currently, these can even reach as much as 85% on selected component groups.

Key root causes of price increases

• Raw material prices, including copper, gold, silver, and tin, remain at or near record highs, directly increasing component and PCB manufacturing costs.
• Strong demand from AI infrastructure, data centres, automotive electrification, and industrial recovery continues to sustain pressure across virtually all component categories.
• Plastics and encapsulants used in component housings, connector bodies, and potting compounds are also exposed to oil-derived cost pressure.

The cumulative effect can be significant: a BOM drawing from several of the most affected manufacturers could see even total affected component costs rise by 15%-20% versus pricing from twelve months ago.

Changes in Open Orders – Practices introduced by the Manufacturers
Please note that since the pandemic period, manufacturers of electronic components have largely turned to passing through cost increases on open orders, prior to delivery. This means that pricing changes are flowing through faster and with less buffer. There are limited practical options to actually prevent from such price changes

We also observe deliberate delivery delays by some manufacturers aimed at ensuring that higher revised prices are already implemented prior the actual shipment.

Lead Times – Official Data vs Market Reality

As noted last time, we observe a visible and accelerating extension of lead times across the majority of component categories. However, there is an important distinction between officially published lead times and actual delivery performance. This is supported by the ECIA data:

In many cases, the actual delivery takes significantly longer than the manufacturer’s official figure. One reason for this is structural: manufacturers are often reluctant to revise their published lead times upward in proportion to market reality, because lead time is a key design selection criterion – longer official lead times can cause designers to switch components in new projects. In practice, official lead times should be treated as indicative minimums, not reliable planning figures. 

Manufacturers are increasingly revising scheduled ship dates on existing backlog, sometimes without prior notice. This is particularly prevalent in the memory segment and automotive-grade components.

• Texas Instruments | Lead time: 20–40 wks | Price increase: +15–85% | Effective: 1 April 2026
• Analog Devices / Maxim | Lead time: 16–28 wks | Price increase: +15–30% | Effective: Feb 2026 (in effect)
• Infineon Technologies | Lead time: 20–30 wks | Price increase: Up to +25% | Effective: 1 April 2026
• STMicroelectronics | Lead time: Up to 55 wks (auto MCU) | Price increase: TBC | Effective: 26 April 2026
• Microchip Technology | Lead time: 18–35 wks | Price increase: +15–50% | Effective: Q2 2026
• Renesas | Lead time: 20–45 wks | Price increase: +5–50% | Effective: 1 July 2026
• NXP Semiconductors | Lead time: 12–20 wks | Price increase: Up to +20% | Effective: 1 April 2026
• Lattice Semiconductor | Lead time: 16–26 wks | Price increase: +15% | Effective: 5 April 2026
• Allegro MicroSystems | Lead time: 14–24 wks | Price increase: >+10% | Effective: 27 April 2026
• Diodes Incorporated | Lead time: 12–22 wks | Price increase: Confirmed | Effective: 1 April 2026
• Nexperia | Lead time: N/A – frozen | Price increase: CRITICAL | Effective: No deliveries
• ONsemiconductor | Lead time: 30–44 wks | Price increase: Elevated | Effective: Ongoing
• Micron / SK Hynix / Samsung (DRAM, NAND, HBM) | Lead time: HBM: allocated through end 2026 | Price increase: CRITICAL +90–110% QoQ | Effective: Ongoing
• TE Connectivity / Phoenix Contact (connectors) | Lead time: 14–24 wks | Price increase: Increasing | Effective: From Feb 2026
• Panasonic | Lead time: 16–30 wks | Price increase: +30–35% | Effective: 1 April 2026
• WIMA | Lead time: 12–24 wks | Price increase: +9% | Effective: 1 April 2026
• Kemet | Lead time: 28–47 wks | Price increase: +18.5% | Effective: 6 April 2026
• Murata | Lead time: 20–30 wks | Price increase: +15–35% | Effective: 1 April 2026
• Yageo / Walsin | Lead time: 20–32 wks | Price increase: +15–20% | Effective: Q1 2026
• Vishay | Lead time: 8–20 wks | Price increase: +6–15% | Effective: Q1 2026
• Ulo |Lead time: 14-16 wks |Price increase: +5% | Effective: 1 April 2026

Legacy technology components – a critical risk
The largest price increases and most severe availability constraints are concentrated in older technology nodes, particularly:

• Supply of lower-density DDR2, DDR3 and DDR4 is tightening as manufacturers shift capacity to DDR5 and HBM, accelerating the phase-out of older technologies and driving disproportionate price increases. Samsung has discontinued SLC 2D eMMC (4, 8 and 16Gb) and DDR4. With an estimated market share of around 75%, this has pushed some memory types into allocation and created wider availability issues at alternative suppliers such as Kioxia. Micron has also ended DDR4 production for the commercial and computing/data centre markets, leaving only limited industrial output for selected technologies. As a result, prices have risen sharply, in some cases hundreds of percentages quarter on quarter. Low-capacity Flash and memory cards: increasingly treated as economically unviable, with reduced production allocation and shrinking support.
• Selected MCUs and analog ICs on mature nodes: manufacturers consolidating production onto newer, more efficient processes, with older part numbers seeing reduced priority

Industrial Metals

 
All four key industrial metals relevant to electronics manufacturing have reached record or near-record levels in 2026, directly impacting PCB fabrication costs, component manufacturing and connector pricing:

• Gold: Priced in the range of ~$4,500–5,000 and long-term bull trend intact. Direct impact on ENIG/ENEPIG PCB surface finishes.
• Silver: Priced ~$75 Surged over 100% since May 2025 driven by industrial demand (photovoltaics) and safe-haven buying. Projected ~95 million oz supply deficit in 2026.
• Copper: Priced >$13,000. Driven by AI data centre construction, EV and grid expansion. Copper market expected to enter structural deficit in 2026.
• Tin: Priced ~$50,000/t. Critical for solder; treated as a proxy for the computing/AI sector.

PCB’s

PCB procurement is experiencing compounding cost pressures from multiple simultaneous directions. The situation has worsened materially since the outbreak of the Middle East conflict.

Raw material pressures

• Copper is one of the dominant PCB cost driver, while gold/silver impacts ENIG and ENEPIG surface finishes that are directly exposed to spot gold pricing.
• Epoxy resins and laminates: after easing in Q4 2025, oil-price-driven costs have reversed sharply. The bisphenol-A and epichlorohydrin feedstocks used in FR4 epoxy are crude oil derivatives. PCB manufacturers now face rising costs on both metal-derived and petroleum-derived inputs simultaneously.

Transport surcharges on PCBs
The freight cost component of PCB procurement has increased materially and is now a significant element of total landed cost:

• Air freight fuel surcharges: PCBs shipped by air from Asia are subject to materially higher fuel surcharges (see Freight section). Estimated impact on total landed cost is +10–40% on total landed cost depending on shipment mode and route.
• Emergency energy surcharges from PCB factories: a growing number of Asian PCB manufacturers are applying explicit energy or freight surcharges on top of base board pricing.
   

 The landed cost of PCBs sourced from Asia has increased by an estimated 10–25% above base board price and this impact is not yet fully reflected in all current quotations.

Resins, Plastics & Petrochemicals

The Strait of Hormuz closure and resulting energy price shock has triggered what industry consultants describe as the most broadly synchronised upward pressure across resin categories in several years. The linkage is direct: plastic resins and epoxy feedstocks are petroleum derivatives. When oil prices spike, costs follow within weeks to months.

Key materials affected:

• Epoxy resins and plastic granulates ABS, PP, PA66, POM used for connector bodies, component housings and cable jacketing. All trending upward since April 2026.
• PVC (cable sheathing): flagged by GEP as among the materials with most-deteriorated availability in March 2026.

The broad impact is that virtually every non-metallic input has come under renewed cost pressure since late February 2026. This will feed through into pricing throughout Q2–Q3 2026.

Freight

Based on the Freightos Baltic Index (FBX), the global FBX container freight index currently stands at a moderate level by historical comparison. The main transpacific and Asia–Europe ocean lanes are broadly stable. However, the oil prices have immediate effect, especially on Air Frieght. Based, on the Freightos Air Index the rates from Asia have increased within the range of 30%-60% versus the pre-war levels. Europe–Middle East air rates have approximately doubled.

General Outlook for Q2/Q3 2026

As mentioned, we do observe a clear and accelerating negative trend in reference to lead times and pricing. We are now concerned about the realistic probability of a broader allocation wave in H2 2026 – driven not by a single factor but by the compounding of depleted inventories, record commodity costs, war-driven energy shock, and multiple concurrent price increases from manufacturers. We strongly encourage to incorporate this risk assessment in your own planning activities.

On memory in particular: this is currently the most volatile and least predictable segment of the market. Order confirmations are disappearing without notice. Prices are being revised upward by multiples of the original, often without advance warning and without price guarantees. LTB orders are being partially cancelled. We recommend treating memory supply as a priority risk area requiring immediate planning attention.