SAN JOSE, Calif. Market research firm iSuppli Corp. expects overall component pricing to decline by 3.3 percent in the first quarter of 2006.
While this will represent an acceleration in price reduction compared to the fourth quarter of 2005, it’s far less than the 4.7 percent decline in the like period a year ago, according to iSuppli (El Segundo, Calif.).
Average electronic component pricing declined by 2.2 percent in fourth quarter of 2005 and 1.1 percent in the third quarter. This compares to steeper decreases of 3.9 percent in the second quarter and 4.7 percent in the first quarter. For all of 2005, electronic component pricing declined by an average of 3 percent per quarter.
iSuppli does not anticipate shortages for the majority of parts in the first quarter. However, the research firm does see some continued shortages for certain densities of flash memory.
Overall demand appears to be strong. “The robust consumer demand that was seen in the fourth quarter should continue through the first quarter of 2006,” said Sang Park, executive fellow for iSuppli, in a statement.
“Consumer confidence is up, along with most global stock markets,” he said. “The general perception that the risk of a global recession has been averted is helping to stimulate worldwide demand for electronic products. Furthermore, the falling prices of these products are continuing to open new markets.”