What's Hot
Jim Carbone -- Purchasing, 4/17/2003 2:00:00 AM
By all indications, the buyers' market for electronics will continue through the rest of the year for a variety of reasons. While unit demand is expected to be strong this year, capacity is abundant which will keep prices low.
A lot of capacity is being added in China, which has the advantage of the low labor rates. Many connectors, resistors and capacitors are being made in China and as the story on page 26 reports, more semiconductors will be built in China over the coming years.
Capacity is likely to remain high through the year because there are no new killer applications that will gobble up semiconductors and other components. Computer sales will be relatively healthy but the days of 25-30% growth in unit shipments are long over. Many computer companies have been hoping that businesses would finally replace their older computer systems, but there are few signs that is happening.
Cell phone shipments will also be strong, but not stellar. Medical and defense electronics will be bright spots, but volumes in those segments tend to be low. Wired telecom is still in the doldrums and other segments will limp until there is an overall recovery of the economy. Business will likely pick up in the second half, but it won't be enough to offset capacity and the buyers' market will continue indefinitely.
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