Suppliers and electronics industry analysts say that while it is a buyers' market for now, when the market turns there will be number of parts in short supply. They point to a lack of investment by both semiconductor companies and passives manufacturers. When demand for end equipment picks up, there won't be enough capacity to support rising demand.

Many electronics buyers agree with that assessment, but for the moment aren't concerned. "When market demand comes back we will be in a tough situation," says a purchasing executive at a leading contract manufacturer. "Enough capacity has been taken out of the marketplace so that unless it comes back gradually, there will be some commodity shortages. But that's far enough on the horizon that I am not having sleepless nights about it."

When demand does come back, prices will rise, but that's not the case now. Electronic component tags continue to decline. Prices for a variety of components including DRAM, SRAM and flash are falling although the decline is at a slower rate than last year.

The declines are due to continued weakness in the telecommunications and computer industries. Weakness is those industries will continue at least though the rest of this year, but many analysts say the weakness will continue until the second half of next year.