As electronic product design cycles typically involve the specifying and design-in of passive, interconnect, and electromechanical components later than semiconductors, suppliers of those parts typically feel an industry downturn a bit later. Unfortunately, that also means they will likely experience any upturn at a later point.
High levels of inventories in the supply chain led to lower than expected demand, mainly from distribution, which negatively impacted financial performance. The companies are struggling to adapt manufacturing capacities and capital expenditures to short-term volume requirements. The profits of large passive component suppliers, including resistor manufactures, shrunk significantly to varying degrees. The results prompted them to cut annualized costs, including some reported headcount reductions,.
One effect of slowing sales has been an easing of severe shortages for many passive components, including resistors. According to data from the Electronic Components Industry Association (ECIA), average lead times for capacitors that hovered around 20 weeks for much of the second half of last year and early next this year are now averaging 16 weeks. Likewise, resistors which saw lead times of 22 weeks are also down to 16 weeks, according to the ECIA. Whereas, resistor manufactures, such as Microhm Electronics, can provide shorter lead time to 4 weeks or even 2 weeks for company's advantageous products.
