Pricing pressure is growing in Auto, OEMs seeking pricing concessions in 2H23 and viewed likely more aggressive in 2024. Auto weaker M/M, ICE/EMEA softer likely on elevated inventory EV noted as unchanged/strong.Asia demand viewed as stable Q/Q at low levels, Americas viewed as flattish, EMEA noted as weaker following strength in 1Q.Asia/Americas unchanged M/M, EMEA appears more elevated. Inventory elevated across virtually all end markets & geos.Inventory elevated both upstream and downstream, EMS inventory viewed increasingly problematic, EMS providers noted as actively attempting to go on credit watch to slow down shipments from distribution.3Q & 4Q outlook viewed as flat sequentially, rebound in bookings/B2B seen in 1Q24 at the earliest.It also depends on the product/technology, for example we are pricing pressure in higher priced MOSFETs and in market like steering and braking, MOSFET suppliers know they need to get more competitive. We are seeing several suppliers give lower prices for future Auto business. In Auto, pricing for 2H is flat but pressure is growing further out.In our meetings with all our customers there are a couple of points that consistently arise: 1) the correction is going to take much longer than initially expected, 2) POS is slowing, and 3) inventory is up and still growing, this is going to take time to work down.We would have to call the business lumpy right now at best… Our sales in April were down 23% M/M from March, then May was up 15% M/M, and June is basically flattish with May, but will be backend loaded, almost half of the month of May shipped in the last seven days.Pricing unchanged M/M, pricing pressures growing, concessions seen in Auto starting in 2H23, more acutely in 2024.Bookings 2Q sales/shipments tracking inline with targets at the midpoint of quarter sales viewed flat to down LSD Q/Q.2Q Tracking Inline, Backlogs Declining, Pricing Seen as More Aggressive in 2H23 Note: This is not the full Insights report, if you are interested in receiving the full report, please click here to schedule a call to discuss the requirements. Component Digest – June 2023 Important Disclosures in the Appendix
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