By Jonathan Cassell
Will the order-frontloading phenomenon of 2025 recur in 2026?
Strong demand trends early this year are evoking memories of the first half of 2025, when electronic component buyers ramped up spending sharply in advance of expected tariff-driven price increases. However, the factors driving rising sales in early 2026 are different from those seen in 2025 and are expected to produce a distinct demand pattern compared to last year.
Early indications suggest that first-half growth in 2026 will be even stronger than in 2025. The January forecast from Supplyframe’s Commodity IQ Demand Index is set to soar by 14.5% in the first half of 2026 compared with the second half of 2025. This represents nearly double the growth rate in the first half of 2025, when the index rose by 7.7% sequentially.
While tariffs were the primary driver of growth in the first half of 2025, the surge this year is being propelled by factors including low inventory levels and surging demand from AI data centers.
The Commodity IQ Inventory Index for January is projected to fall by 13.3% sequentially in the first half of 2026. This will cause the index score to drop to 47.8, a five-year low. The rock-bottom inventory level is the result of an extended period of global inventory rebalancing and digestion that has been ongoing since early 2021, during the COVID-19 supply-chain crisis.
With inventory at extremely low levels, suppliers are seeing strong orders as buyers work to replenish depleted stockpiles.
Meanwhile, AI-related sales are rising quickly and accounting for an ever-expanding share of component sales. AI-related semiconductors accounted for one-third of global chip market revenue in 2025, a total that is expected to rise to more than 50% in 2029, according to one market watcher. Other commodity groups are experiencing rising AI-related demand as well.
While tariffs remain a major issue for electronic component buyers in 2026, they are not expected to drive purchasing dynamics in the first half to the same degree they did in 2025.
Instead, growth in 2026 is being propelled far more by end-market growth. The U.S. Semiconductor Industry Association predicts global chip industry revenue will rise to more than $1 trillion in 2026, up from $791.7 billion in 2025, representing an increase of more than 26%. That suggests that AI-driven semiconductor sales are driving growth in 2026, rather than tariff-driven sales pull-through.
While it’s still early in the year, the change in growth drivers and dynamics could mean that 2026 will experience a different seasonal growth pattern compared to 2025. The tariff-driven frontloading phenomenon caused the Commodity IQ Demand Index to reach its 2025 annual peak in Q2. With Q2 2026 growth expected to decelerate slightly compared to Q1, this could signal a change in seasonality compared to 2025, with the quarterly peak arriving at a different time, possibly in the second half.
It should be noted that the U.S.-Iran war could change the demand outlook. If the war persists and continues to drive up energy prices, it could result in reduced spending on AI data centers. This would diminish demand growth for related electronic components.
Supplyframe advises buyers to use Q1 and Q2 to lock down supplies of the highest-risk component categories rather than waiting for shortages to worsen.
Buyers should qualify alternate sources wherever possible and place orders earlier for critical or single-source devices. At the same time, buyers should avoid overbuying, re-quote less-constrained parts as conditions shift, and build contingency plans around the components most likely to disrupt production.
While 2026 is not expected to bring a replay of the tariff-dominated demand scenario of 2025, buyers will continue to face elevated demand risk due to low inventories and high AI-related demand.