Producer Price Index: Semiconductor and electronic components

The Producer Price Index for semiconductors and electronic components is estimated at 59.5 index points in 2026, up at a 1.7% compound annual rate from 2021, as robust demand meets gradually normalizing supply conditions. Strong chip content growth in automotive, smart devices and industrial equipment, combined with a tight labor market that sustains consumer electronics spending, has kept prices elevated relative to the pre-pandemic decade of steady declines. At the same time, the sector's recovery from pandemic-era disruptions has shifted from acute shortages to more balanced market conditions, with supply chain reconfiguration and added capacity preventing renewed price spikes but not yet triggering broad-based deflation.

Over the five years through 2026, price behavior marks a clear break from the historic pattern of Moore's Law-driven erosion. The global chip shortage that began in 2021 slowed the long-run downtrend, with headline index movement muted that year despite cost pressures and actions such as TSMC's 20.0% list-price increase. In 2022, broad inflation and lingering logistics bottlenecks caused the index to surge by 4.0%, before gains inched up by 0.6% in 2023 and subsequent years as new capacity, reshored production and diversified supply chains came online. Throughout 2024–2026, persistent digitization—ranging from connected vehicles and smart appliances to industrial automation—kept demand strong enough to sustain the move from outright price decline to modest appreciation, underpinning the 1.7% CAGR that lifts the index to 59.5 by 2026.