July 2019 – Component Shortages: what’s the delay?

Published on: 19/07/2019

The demand for electronic components is growing exponentially, here we discuss the reasons for long delays and how to best to avoid component shortages

The demand for electronic components is growing rapidly because of the increase in handheld devices with relatively short product lifecycles and the surge of electronics being used in new technologies. Two key reasons for the increase in demand is the automotive and IoT industries, causing pressure on the market by placing stronger than anticipated demands on manufacturers.

With an unusual level of demand such as automotive systems and requirements for display systems, LED lighting, sensors and artificial intelligence features have all contributed to the inflation of components required by the market. And as a result forecasts suggest that in years to come the number of MLCCs could rise to 22,000 in just one car.

In addition to this, the annual production of electric vehicles is set to reach 2.4million units in 2021 compared to just 409,000 in 2014. This colossal rise is the result of new emissions regulations and incentives from the government which doesn’t appear to be slowing down any time soon.

Similarly, 30 years ago IoT devices were a dream and far from reality, yet today smart devices are adding a further burden to an already constrained market. It is forecasted that IoT devices are set to grow by almost 31 billion worldwide in the coming years which causes growing concerns for manufacturers.

Component shortages

The industry is experiencing long delays because a large number of customers are panic buying and double-ordering components to try and eliminate further production delays. This does, however, in the short term put immense pressure on the supply chain which is why companies should implement a longer term strategy and put in place effective planning and a flexible order system for their projects. This type of strategy will protect customers from unexpected supply chain issues, especially the current shortage the industry is experiencing.

Forecasters are predicting that the current component shortages will continue in to 2020 so it’s extremely important for businesses to device a buying strategy from here onwards.

This is not the first time the industry has seen long delays for components and it will definitely not be the last, especially as buying behaviour and purchase decisions are so unpredictable. By implementing a buying strategy, including working with your distributor to forward buy and place scheduled orders, will enable your business to better manage inventory demands in the future.

Having stock on the shelf is vital for distributors in today’s market. Most companies stock against their forecasts but at GD Rectifiers it’s important for us to have a wide range of components available straight away which is why we also ensure we have access to additional stock. We also offer a wide range of products from over 25 manufacturers including IXYS, Littelfuse, Westcode, EDI, Enerdoor, Mersen, Bussmann, Semikron, Telcon and Sirio.

For both customers and distributors that are experiencing long lead times, our advice would be to contact GD Rectifiers, we can help you source the components you need. We work directly with the factories to ensure the fastest delivery time of non-stocked products. We can also offer alternative parts for your requirements, suggesting comparison products that will achieve the same performance.

GD Rectifiers are well stocked, view our live stock list here – https://www.gdrectifiers.co.uk/stock_list

For further information on our electronic component availability and to discuss your requirements, please call our team on: 01444 243 452 or email: enquiries@gdrectifiers.co.uk