Electronic Components Shortage Market impact

Electronic Components Shortage Market impact

The COVID-19 pandemic has driven the Electronic Components shortage with severely Supply chain disrupted.

The continue impact to global freight and logistics for longer Lead Times and Material Costs increased to supply chains remains a critical issue.
Defense, Military and Aerospace sectors are faced with increases due to an upward trend in raw materials pricing -these are typically high reliability parts.

ELECTRONIC COMPONENTS:

Complex Semiconductors, Analog products, Raw Materials etc… limited supply and Price increases may continue.
Foundries are increasing wafer prices, and in turn, IC companies are increasing device pricing.
The demand for semiconductors is driven by confluence of acceleration on the digital transformation.

MATERIALS SHORTAGE:

Most suppliers are facing capacity constraints and shortages for substrates, wire bonding, lead frame, materials, and testing capacity, all of which are parts of the supply chain
With the continuation of robust demand, suppliers expect stable supply to be a challenge for the foreseeable future.
Tantalum and polymer pricing continues to be volatile due to instability in the supply chain as well as increased raw material, logistics and operational costs primarily driven by the impact from the global pandemic.

PRICES INCREASE:

Prices are expected to continue surging in the semiconductor supply chain.
There are significant cost increases on wafers, lead frames, substrates, assembly & test as well as logistics.
With limited supply of wafers, most suppliers are raising prices due to higher costs from foundry partners.
Suppliers are passing through all of the cost increases to ensure supply continuity.

LEAD TIME:

A surge in demand is impacting lead times, causing lead frame shortages from most manufacturers. Lead frame supply is extremely constrained, and most manufactures are allocating supply. Lead times continue to extend to 90 weeks, this has a significant impact on low volume high mix products.

PRODUCTIONS CAPACITY:

Automotive have had to shut down production due to the severe shortfall of chips and wafer. Frontend and back-end loading is very high with most capacity booked.
Future investment in expanded foundry capacity will therefore be critical so that the Automotive Industry can avoid such supply chain upheavals in the future.

MARKET DYNAMICS:

The supply base expects continued revenue growth driven by strong demand in all end markets.
Prices are expected to continue surging in the semiconductor supply chain.
With the continuation of robust demand, suppliers expect stable supply to be a challenge for the foreseeable future.

FORECAST PLANS:

The importance of long-term visibility during this constrained market is essential.
To provide supply continuity, some of the Analog suppliers are encouraging customers to load long term orders to enable better visibility for wafer and capacity planning.
Inventory levels in the channel are historically low and supply chain disruption is significantly up.

INVENTORY MANAGEMENT:

Several Solutions for parts inventory management are available for a variety of manufacturing sectors including Automotive, Aerospace and Defense sectors for which the Cost of Electronic Parts impacts overall Warehousing costs.

For instance the European ESCC standard ECSS-Q-ST-60-14C specifies the requirements, also known as “relifing requirements”, for the planned, intentional storage, control, and removal from storage of electronic, electrical and electromechanical parts which are intended to be used for space applications.


MICROREL offers truly experienced Consulting services for EEE Parts Procurement selection of High-Reliability Electronic Components and RF Microwave following sectors:

  • MMIC – Monolithic Microwave IC Design (1-100GHz) from L-band to V-band both in GaAs and GaN technologies
  • Hybrids, Packaging & Assemblies
  • COTS & PEDs (Plastic) components for High Reliability applications
  • Custom screening (Environmental/ Mechanical & Endurance) test and inspections plans
  • Evaluation Plans and Manufacturers assessment for validations & characterizations suitability.

In details, the following topics are covered:

 

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