Many analysts believe that the recovery of the electronics industry is under way. They point out that inventories have been greatly reduced since last year, demand is slowly starting to pick up and prices for some parts on the spot market are rising.

However, electronics buyers should not worry about skyrocketing tags any time soon. The recovery will be slow and it will likely take months for a full-scale recovery to take hold. That means existing capacity for semiconductors and passive should be adequate until well into next year. Buyers purchasing on the spot market may see prices bounce around especially for memory and microprocessors, but overall prices will be flat to falling for the next six months for most products.

In a weak market, prices may go up temporarily due to mix issues. DRAM is an example. If manufacturers don't make enough of a double data rate (DDR) part in a certain configuration and density, a short-term shortage and high prices may result until manufacturers boost production to meet increased demand for the part.

There's no question there has been a lack of capital investment and that will eventually mean higher prices once demand for end equipment becomes robust. When that will occur remains to be seen. Market researcher IC Insight notes that electronics system shipments fell 14% last year for the first time ever.