Spectra's Electronic Design to Delivery Index (EDDI) - May 2023

Welcome to the Electronic Design to Delivery Index

The Spectra Electronic Design to Delivery Index (EDDI) is designed to function as a finger on the pulse of the electronics industry. By providing data on the electronic assembly realization process - from PCB design to sourcing and delivery - the EDDI gives analysts and professionals a broad view of electronics industry activity.

Spectra's EDDI report contains two main sections:

• The Industry Supply Index - which tracks the supply of different commodity categories over time. This section is included in the current edition of the EDDI report.
• The Industry Demand Index, which measures sourcing demand for different categories of components across time and geographies. This section is also included in the current edition of the EDDI report.

In recent years the electronics industry has been faced with supply chain challenges for components on a global scale, with the shortage of Multilayer Ceramic Capacitors (MLCCs) in 2017-2018 and the current semiconductor shortage being two examples. This increasingly requires proactive planning and mitigation strategies to avoid line-down situations. Industry players as a whole are lacking visibility into how these economic patterns will impact their operations. Our monthly publication tracks supply and demand trends for Nexar’s Component Library of 70 million parts. We provide 25 indices in each section: one index tracking the overall components market, nine category indices tracking different commodity types such as Integrated Circuits or Discrete Semiconductors, and a selection of 15 subcategory indices to shine a spotlight on popular component types. For more information on how we compile and calculate this data, see our “Methodologies” section.

Spectra Industry Supply Index

The Spectra Industry Supply Index (ISI) tracks the global availability of components over time. Featuring more than a decade of data across thousands of part manufacturers, the Spectra Industry Supply Index can provide both a high-level view of macroeconomic conditions across the entire electronics manufacturing landscape, while also highlighting supply fluctuations within over 150 different part categories from ADCs to Zener Diodes.

Spectra Industry Demand Index

The Spectra Industry Demand Index (IDI) is powered by Nexar’s unique insights in online sourcing patterns. By tracking sourcing activities within the Nexar sourcing network, the Demand Index measures the effort expended to source parts. When compared with the Supply Index, the Demand Index provides the ability to examine the dynamic relationship between sourcing activity and inventory levels for the same group of parts.

Methodology

The Spectra Electronic Design to Delivery Index observes trends for 70 million MPNs on a daily basis and aggregates this data into monthly averages. MPNs are organized by the Nexar Category Taxonomy and are aggregated at the category level.

For the Supply Index, monthly availability is compared to a baseline month (January 2020, pre-pandemic) which represents a value of 100 on the scale. For our topline industry index, we apply a weighting to each category based on the proportion of sourcing and design activity that occurs within each category across the Nexar landscape. This weighting ensures that changes in critical commodity categories (such as ICs and Passives) are reflected more strongly in the topline index than changes in more specialized categories.The Demand Index is calculated using part sourcing actions by users on Nexar’s sourcing network. Part sourcing activity is tracked via purchase intent interactions with components across Nexar’s sourcing network and is normalized by the volume of active users. This metric is then aggregated over the collection of parts in the Nexar component database and indexed to January 2020 in the same way as the Supply Index. As a result, this index measures the approximate effort expended by a buyer to source a part in a particular category.

How to Use this Report

This report should be used by businesses and industry professionals who want to be proactive rather than reactive in the face of supply disruptions. Component and Design Engineers can use this report to understand whether their designs are resilient to supply chain risk, and to decide where to invest in finding alternates. Business Analysts and Should-Cost Modelers can use this data to demonstrably identify supply chain risk across their entire Approved Component List. Supply Chain Managers and Buyers can use this data to make decisions about whether to replenish their strategic reserves or optimize their inventory carrying costs. In the C-suite, understanding availability trends can help businesses minimize Purchase Price Variance by recognizing supply crunches as they happen.

Insights from this month's report:

• The Industry Supply Index increased by 2 points this month totaling 159 points. This is the 22nd month-over-month gain in the ISI where the last low was seen in July 2021 at 72 points, for a total positive change of 121%. 
• The largest category index lift was in the Connectors supply index with 7 points (4.4%), totaling 158 points. This is the first lift in the index after a short plateau seen from February - April 2023.
• The Industry Demand Index increased overall by 2 points (1.9%) this month to a total of 108 points. This the first month of a slight incline since the last index value high in September 2022.
• The largest demand index decline reported was in Power Products with 4 points (3.4%). This is the 7th consecutive month of a decline since October 2022 for a total decrease of 40 points (26%). 

Sign in to your Spectra account or sign up for a free Spectra account to see more from this month’s EDDI.

For more information on how data and intelligence from Spectra can power your business, visit our website at nexar.com/spectra.