Price of semiconductor and electronic components

The price of semiconductors and electronic components is estimated at 58.4 index points in 2025, reflecting ongoing growth in demand driven by sectors such as automotive, smart technology, and consumer electronics. The persistent integration of semiconductors into a wider range of products, alongside a tight labor market supporting steady consumer spending, is expected to bolster prices. The sector's recovery from previous pandemic-induced disruptions continues, with market conditions stabilized by strong end-user demand and ongoing supply chain adjustments.

The semiconductor market underwent significant volatility from 2020 to 2025 following a prolonged period of steady price declines attributed to Moore's Law and heightened industry competition. After reaching a low due to overproduction and raised inventory levels in 2019, the pandemic's onset initially suppressed demand in 2020 as vehicle sales declined, prompting manufacturers to reduce semiconductor orders. However, later in 2020, demand rapidly rebounded as consumer purchases picked up, contributing to higher prices for components. The global chip shortage that began in 2021 marked a departure from the historical trend of declining prices, with the supply constraint pushing prices upward. Although prices generally continued to fall in 2021, the rate of decline slowed substantially due to supply interruptions and increased costs. Notably, TSMC's announcement of a 20.0% price hike in August 2021 had a delayed but meaningful impact on pricing, with a marginal 0.2% decline recorded in the year.

Inflationary pressures exerted additional upward pressure on prices in 2022, driving the semiconductor price index up by 4.0% as manufacturers faced higher production costs amid ongoing chip shortages and robust consumer demand. By 2023, prices increased modestly by 0.6% as strong demand for technology-integrated products, such as smart appliances and vehicles, was fueled by elevated consumer spending supported by a tight labor market. These conditions sustained pricing momentum into 2024 and are expected to continue through 2025, presuming broader economic stability.

Macroeconomic trends such as global supply chain adjustments, shifting consumer preferences for smart technology, and inflation have become key determinants of price dynamics. As industries across manufacturing, automotive, and consumer electronics accelerate digital transformation and the adoption of smart devices, sustained demand for semiconductors is expected to underpin moderate price growth. Between 2021 and 2025, the overall growth rate for prices is 1.3%, indicating a marked shift from the decline that characterized the prior decade.