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24 November 2021
Global chip shortage to impact electronic retailers holiday season
The holiday season usually marks the start of an electronics sales boon for retailers. Consumers buy more electronics in the lead up to Christmas than at any other time of the year. This year, however, things are different.
This holiday season, the global chip shortage is set to impact electronic retailers, with shortages of popular products like games consoles, graphics cards, smartphones, laptops and tablets likely to persist through to 2022.
Due to problems buying stock, most retailers are bracing themselves for low Christmas electronics goods sales. The global chip shortage means fewer electronics goods are being made, so there is a long lead time from suppliers - some retailers are waiting several months for new stock, only for it to sell out within days.
Consumers should start holiday shopping now
Chips are in critically short supply this year, which has reduced manufacturing output at many of the world’s biggest factories.
Companies like Samsung, Apple, Intel and AMD are experiencing problems getting the chips they need. Today, some chips have delays of over a year, and inventory supplies for chips are running low, putting pressure on supply chains.
All of this means there is a shortage of in-demand electronics goods, from games consoles to smartwatches. The message is simple - consumers should start holiday shopping now to ensure they can get hold of the electronics they want.
It is also crucial that consumers don’t take stock levels for granted. What’s in stock today might be out of stock tomorrow, and many retailers have lead times of several months for new stock. So, if you need it, you should buy it while you can.
Is the chip shortage being blown out of proportion?
We are so used to next-day Amazon delivery and seeing shiny electronics on store shelves that chip shortages appear to be a fantasy.
However, the chip shortage is real - manufacturers are struggling to create enough chips, and suppliers can’t get hold of the inventory they need.
Another fox in the henhouse is chip price increases. Companies are bidding through the roof for components, and prices are rising rapidly. Manufacturers don’t absorb these price rises - they are passed down the supply chain, and eventually, they find their way to the consumer (creating consumer inflation).
Chip prices are increasing for several reasons. The obvious reason is supply and demand economics - the less available something is, the higher the price.
Another significant reason is prices for rare earth metals have exploded over the last 12 months, moving nearly 50% higher on average since March.
Summing up the chip shortage
There is a severe chip shortage happening right now that threatens the availability of electronics goods this holiday season. Prices for chips are also skyrocketing, increasing the price of devices like smartphones and smart devices.
All of this is to say, if you plan on buying some chip-reliant electronics this holiday season, you should start shopping now or face being disappointed.
07 July 2021
The Global Chip Shortage Has Created a New Problem: Counterfeits
The global chip shortage is officially wreaking havoc.
The world's biggest carmakers, including Toyota and Volkswagen, have had to slow down vehicle production, and Samsung - who make their own chips - has had to delay the launch of several smartphones due to be released in 2021.
These are but a few examples of thousands of cases where the global chip shortage is wreaking havoc with manufacturers.
But that’s not all - the global chip shortage is creating a new problem: counterfeit components.
The issue is simple: chip manufacturers can’t make enough chips which has given counterfeiters a golden opportunity to plug the gap.
A counterfeit part is an unauthorised copy, imitation, substitute, or modification of an original component.
Counterfeit components are illegal and should not be used under any circumstances, but counterfeiters don’t care. They defraud you and hope you don’t notice. And if you do, there is virtually no chance of getting your money back.
With no accountability, counterfeiters are having a field day.
A sophisticated criminal enterprise
The counterfeit electronic components industry is a multi-million pound industry. It has become sophisticated and impossible to shut down.
Criminals are taking advantage of weakened supply chains, inadequate quality control processes and inadequate reporting to flood the market with illegal components. They are praying on weaknesses and desperation to profit.
Counterfeit chips can look like the real thing, but worse still is they can also perform similarly during basic benchmarks and tests. This allows the most sophisticated components to penetrate manufacturing lines.
The risks of using counterfeit components include:
- Financial loss
- Reputational damage
- Loss of customers
- Refunds and regulatory fines
- Bribery from criminals
- Poor and dangerous product performance
How we can help you avoid counterfeits
We provide industry-leading chip testing to catch counterfeit goods. We have ISO 9001:2015 certification and ESD qualified staff. We have several anti-counterfeiting technologies available including a SENTRY machine, die testing and decapsulation testing.
We specialise in the procurement and delivery of electronic components for a wide variety of industries from the world's leading manufacturers.
If you work with us as your electronic components distributor, you can avoid the issue of counterfeit chips and components for good. We have standard anti-counterfeiting policies and all the components we supply have a guarantee.
If you are still exploring your options, here’s some general advice:
- If it is too good to be true, it probably is
- Make sure any guarantee is worth the paper it is printed on
- Look for ISO 9001:2015 certification
- Demand testing prior to all deliveries
- Only work with suppliers who have an anti-counterfeiting policy
- Beware of spoof companies that pretend to be someone they are not
- Consider staff training to identify when something isn’t right with suppliers
If you are concerned about counterfeit components in your supply chain we are happy to provide advice. Call us on 01904 415 415 for a chat with our experts. The chip shortage does not have to affect your supply chain with our help.
