Global Electronic Components Supply Chain Challenges & Solution



As a platform for buying and selling electronics, ElecXtra has a unique perspective on product quality, availability and scarcity of electronic equipment and accessories. So, as you can imagine, the last few years in international electronic components business have been unlike any other.

Before the pandemic, the electronics industry struggled with supply shortages, rising costs and lead times. Increasing demand on the one hand and the lack of important materials and components on the other hand made it difficult to meet the demand, especially for non-standard materials, such as memory, multilayer ceramic capacitors (MLCCs), transistors, diodes and. even resistors.

However, equipment manufacturers (OEMs) have begun implementing new guidelines to reduce shipping risks and minimize shortages. By 2020, the electronic components market has stabilized.

However, the stability didn’t last that long.



COVID-19 is causing electronic components shortages and reduction in production

When the COVID-19 virus hit, the electronics components supply chain was greatly reduced. The source of the disease - Wuhan, China - is known for a large number of electronic equipment and components. The area closed down, the factories either reduced production capacity or stopped production altogether. With supply reduced, the demand for electronics components skyrocketed globally.

As the coronavirus spreads around the world, the more scarce the electronic components have become. Companies based in Malaysia, the Philippines and Indonesia cannot manufacture or ship parts. As a result, OEMs around the world cannot manufacture their products.

In the end, it doesn't matter where the supplier is located or where the final product is made; The disease disrupted all purchases and all products and sales were removed from the market. The lead time for advanced semiconductor, which is usually long, (18 weeks) have increased to 36 weeks.

More so, many industries have shifted their production to focus on healthcare components.



COVID-19 is causing persistent component shortages

This disease is becoming a problem in all areas of commerce, including the electronics components supply chain. Advances in technologies such as 5G, digital intelligence, and the cloud continue to strengthen and stimulate consumer demand in electronics, automobiles, medical devices, and industrial and electronic products, among others.

At the same time, the virus outbreak is affecting many semiconductor companies and those that are part of the semiconductor ecosystem. Government orders requiring temporary closures or layoffs is causing shortages, increasing closings of units and supply chains.

The cost and delivery time of these essential items continue to increase; Most sectors now trade for longer than 19 weeks, reducing component markets flexibility.


Semiconductors are still an important product, and devices such as microcontrollers and analog controllers are the most affected. The industry has faced periods of high demand in the past, with the balance of supply and demand worse than before. With remote workers, increasing data and the constant need for security in networked devices, the semiconductor market is estimated to reach $500 million for the first time in history by 2021. Advice is needed for these segments. until 2023.

As a result, manufacturers and producers have raised prices by between 5% and 200% according to the technology. Both supply and price increases are expected to continue through 2023.



Where Is Electronic Component Shortage Headed?

As technology continues to develop, there is a strong demand for more materials in semiconductors. At the same time, retailers will be looking for new, desirable parts. Suppliers who continue to produce legacy electronic products are the ones that are manufacturing for a wide customer base including large retailers.

Meanwhile, there is increasing recognition that the uncertain future of COVID-19 is contributing to our current problems. As we see now in 2020, this virus cannot be predicted and can even influence whether the company is open or closed, whether the product is manufactured or not. We don't know how many more waves are waiting for us or what they will do.

It is also difficult to know when the supply will return to meet the needs, although many orders for the facilities are believed to be available soon, at least until 2023. Chain design or the production of the supply chain strategies are being implemented. They will inurn affect all aspects of electronic business, from design and pre-production to managing the product life cycle and delivery.



ElecXtra As A Solution To Electronic Components Shortage


ElecXtra have modified their electronic components supply chain to ease the shortage. Here are the key aspects that ElecXtra electronic components supply chain have:


  • Fast Shipping - ElecXtra offers fast shipping on all orders that you make.

  • Member Discounts - As an ElecXtra member, you are eligible for over ₹2000 discount on every order that you make.

  • Money Return - Should the product you get be undesirable, you are eligible for money back guarantee within 7 days.

  • Support 24/7 - ElecXtra support team is available 24/7 to solve all issues you may have within the supply chain.

  • Only the component you need - Save money with ElecXtra by buying only the component that you need instead of buying a new one.

  • Sell what you don’t need - Free up yourt space by selling the components and products you no longer need.

  • Enjoy ElecXtra’s global footprint to mitigate disruptions that may arise in one specific region.

  • Increase collaboration and visibility among product design, procurement and supply chain management organizations to provide suppliers with the lead time they desire.

  • Move away from single-sourced parts.


Summary

Regardless of the future of electronic components supply chain, it is important to have a strong supply chain strategy, distribution plans and strong sales relationships to ensure the smooth operations. But when the good times are near, it is wise to plan and have a strategy incase of another shortage.

Stay ahead of the game with ElecXtra.




14 views0 comments