Showing posts tagged 'lead times'
13 October 2021
Electronic Component Shortage update
The ongoing electronic component shortage is one of the biggest challenges global supply chains face today, with demand for many components, from chips to actives and passives, well and truly outstripping supply.
A lot has happened in the last month, with new research and analyst insights pointing to when demand might ease (hint: it won’t be this year).
Here’s your latest electronic component shortage update:
Chip lead times hit all-time high
According to Susquehanna Financial Group, chip lead times hit an all-time high of 21-weeks in September, up from 20.2 weeks in August and 18 weeks in July. However, in a research note, Susquehanna analyst Chris Rolland said that while lead times for some chips got worse, lead times for others like power management chips saw relief.
Gartner says global chip shortage will persist until Q2 2022
Gartner predicts the global semiconductor shortage will persist through Q1 2022 but recover to normal levels by the second quarter of 2022. They rate the current shortage as moderate and the shortages of early 2021 as severe.
Chipmakers should brace for 'oversupply' in 2023
Analyst firm IDC predicts that the global chip shortage may well turn into an oversupply situation in 2023, sending prices diving. They say the industry will see normalisation by the middle of 2022, with a potential for overcapacity in 2023.
EU pushes for chip sovereignty
The EU will legislate for chip sovereignty with the forthcoming “European Chips Act”, bringing together the EU’s semiconductor research, design, and testing capabilities, so that EU countries can make demand meet supply as one nation. “Europe cannot and will not lag behind,” the EU said in a statement on the Chips Act.
Ford Europe predicts chip shortages could continue to 2024
In an interview with CNBC, Ford Europe chairman of the management board Gunnar Herrmann estimated the chip shortage could continue through to 2024. Herrmann also revealed a new company crisis in raw materials. “It’s not only semiconductors,” he says, “you find shortages or constraints all over the place.”
Tesla's China output halted on chips shortage
Tesla temporarily halted some output at its Shanghai factory for four days in August due to the chips shortage, shutting part of the production line for electronic control units (ECUs), a small but significant action that cost it millions in revenue.
New forecast says chip shortage to cost car industry $210 billion
The total estimated cost of the chips shortage to the car industry keeps rising, with a new report from AlixPartners predicting a global cost of $210 billion. This is nearly double what their first report predicted in May ($110 billion).
Counterfeit chips penetrating the supply chain
As a result of the chips shortage, some manufacturers are turning to riskier supply channels, leaving themselves vulnerable to counterfeits. As ZDNet reports, this puts low-volume manufacturers whose supply chains are less established at risk.
If you are worried about counterfeits in your supply chain, read our 8 Step Guide To Buying Electronic Components With Confidence and Avoiding Counterfeits.
If you are struggling to find those hard to find and obsolete components. Contact Cyclops Electronics today. Call 01904 415 415, email email@example.com or visit our website https://www.cyclops-electronics.com/.
22 September 2021
Causes of IC Shortage
There’s a serious shortage of integrated circuits affecting every corner of the electronics world. Discrete circuits, optoelectronics and sensors are also experiencing shortages, putting pressure on supply chains from top to bottom.
What are the causes of IC shortages? This article will explore the main causes, so that you can understand what’s going on.
The coronavirus pandemic reshaped demand for semiconductors, shifting automotive demand to device demand (car plants shut down, while demand for electronic devices soared with stay at home and remote working).
Now that automotive production is ramping back up, there aren’t enough ICs to go around, causing a shortage across all industry sectors.
The pandemic also caused short-term, unplanned plant shutdowns and labour shortages, reducing the number of ICs manufactured.
The logistics industry is still recovering from COVID-induced shutdowns and travel restrictions. While air and sea freight is running at good capacity, road transport is proving difficult across borders, creating supply constraints.
In 2020, air cargo capacity saw a 20% decline. In 2021, it’s back to normal, but you still have the problem of moving components on the ground.
In the UK, there is also a serious driver shortage underway that is affecting everything from electronic components to supermarket shelves.
The amount of time that passes between ordering semiconductors and taking delivery has increased to record levels. In July 2021, it surpassed 20 weeks, the highest wait time since the start of the year and eight days longer than June.
Longer lead times can be caused by a variety of factors, but in this case it’s caused by foundries running at capacity with no room for acceleration. Labour shortages and problems getting hold of materials are exasperating the problem.
A shortage of raw materials is causing big problems for semiconductor manufacturers, who can’t get the materials they need to meet demand. Shortages of raw materials and high raw material prices are combining to squeeze production.
The soaring price of raw materials is also increasing the prices of ICs, with some components seeing a yearly price increase up to 40%. These costs will eventually slosh back to consumers who will have to stomach higher prices.
Whether we’re talking about the communications, automotive or consumer electronics sector, IC stockpiling has exploded. The world’s biggest manufacturers have stockpiled huge quantities of components for themselves.
This ringfencing of components by nervous manufacturers eager to secure inventory takes a significant volume of components off the open market, squeezes the supply chain, and gives the biggest players an upper hand over everyone else.
For all their bad press, China make a lot of chips - around a billion a day. Their biggest chipmaker, SMIC, was hit by US sanctions in late 2020, eliminating SMIC chips from the US market. You’d think this would mean more chips for the rest of the world, but China recoiled and went defensive, keeping most of the chips for themselves.
US sanctions twisted the global supply chain out of shape, creating volatility in an industry that was already in turmoil from the pandemic.
28 April 2021
Electronics Counterfeiters Capitalize on Component Shortages
The electronics industry is experiencing a components shortage which is bad news for everyone except counterfeiters who are seeing greater demand than ever.
The total available market for counterfeit electronic components is billions of pounds, so it makes no wonder this illegal activity is seeing rapid growth.
What is a counterfeit part?
A counterfeit part is an unauthorised copy, imitation, substitute, or modification of an original component. Counterfeit components are a misrepresentation of the real thing but can be extremely convincing they are legitimate.
Giveaways that components are counterfeits include:
- Colour variances
- Misspellings and incorrect labelling
- Mismatched date codes
- Duplicate date codes and labels
- Missing items
- Poor packaging and quality control
- Font variances
- Country of origin problems
- Signs of “resurfacing”
- Failure in tests and performance issues
How are counterfeiters capitalising on component shortages?
Electronics counterfeiters are capitalising on component shortages by penetrating weakened supply chains, taking advantage of inadequate quality control processes and taking advantage of inadequate reporting.
Demand is exceeding supply for many electronic components, exasperating the issue. The semiconductor shortage is the current big one.
As lead times get pushed out, buyers are faced with a dilemma: should they stick with trusted suppliers and put up with delays or look for another supplier? The risk is the ‘other supplier’ being a counterfeiter or not having the necessary controls in place to ensure that shipments do not get intercepted and changed.
This dilemma is when counterfeiters strike to take advantage. The wrong decision can have significant financial and economic consequences.
Another area of focus for counterfeiters is the scarcity of parts caused by end-of-life designations. There is significant demand for end-of-life components, but they can be very hard to find. Counterfeiters pray on this weakness with illegitimate copies.
There’s also a grey market for used electronic components that are refurbished or reconditioned and sold as new. The danger with this is using components that are spent and not repaired properly. When you buy “new” the components should be exactly that. Buying used is never a good idea, unless you want used parts.
How can I protect myself from counterfeiters?
First of all, you should read our 8 Step Guide To Buying Electronic Components With Confidence and Avoiding Counterfeits.
Secondly, you should only work with electronic component suppliers who have a compliance program in place. A good benchmark is suppliers who are ERAI (Electronic Resellers Association International) members. We are ERAI members, so we are on the ERAI database and use ERAI supply chain risk mitigation solutions.
Secondly, it’s really important that you have adequate inspection and testing processes in place to verify the components you receive. If your supplier tests components for you, what testing facilities do they use, and which services are performed?
Electronics counterfeiters are capitalising on component shortages by taking advantage of inadequate quality control and reporting processes and weakened supply chains.
A robust supply chain and trusted parts suppliers are the two keys to protecting your organisation. If you are concerned about counterfeit components in your supply chain we’re happy to provide advice. Call us on 01904 415 415 for a chat.
22 April 2021
Why We're Facing a Global Semiconductor Shortage
The world is experiencing a semiconductor shortage at a time when demand for semiconductors is at an all-time high. Manufacturers can’t make enough of them and we’re now seeing this affect the availability of products.
You probably remember last year Sony released the PlayStation 5 and Microsoft released the Xbox Series X. AMD released the Big Navi GPU (RX 6000) and Apple released the iPhone 12 range. What all these products have in common is they were all directly affected by the semiconductor shortage. Demand well and truly exceeded supply.
What’s causing the shortage?
A perfect storm has hit the semiconductor market. It isn’t one thing but a combination of different things that’s causing the shortage today.
The COVID-19 pandemic
When the COVID-19 pandemic hit, car and commercial vehicle sales took a hit. Estimates suggest that sales fell by 50% or more within a single month. In response, car manufacturers scaled back orders for semiconductors and other parts.
At the same time, demand for electronics chips soared as more people spent time working from home and on furlough.
Laptops, smartphones, drones, smartwatches, tablets, kitchen appliances - everything has a semiconductor nowadays. Then you have IT, data centres, internet infrastructure and cloud and edge computing. All are powered by semiconductors.
And so, the factories that were at capacity making semiconductors for cars switched to making semiconductors for electronics. This was a blessing in disguise for factories because semiconductors for electronics have a higher margin. However, it has caused a problem for car manufacturers who now need to ramp up production.
The situation now is this - car sales are picking up and car manufacturers are fighting for orders against electronics manufacturers. Factories are at capacity and can’t make enough to go around. This is feeding through to nearly every sector.
Ultimately, this is the result of poor planning from car makers who cut orders too deeply last year at the beginning of the COVID-19 pandemic.
Even before the COVID-19 pandemic hit, there weren’t enough factories to meet semiconductor demand. There were long lead times in 2019 because semiconductor demand outpaced the ability of factories to make them. This problem has persisted through to 2021 and has been compounded by the COVID-19 pandemic.
With most factories running at 99-100% capacity, there is very little room for boosted output. You would think that the solution is to build more factories, but this would not solve the problem today or even a year from now because semiconductor fabs take at least a year to build with another 6-12 months in setup time.
Semiconductor manufacturers are investing in new factories, expansion and more efficient technologies, but short-term solutions these are not.
The US is attempting to bring semiconductor manufacturing to US soil to remedy this or at least reduce dependency on foreign suppliers.
US and China trade war
Calls for domestic manufacturing are heating up in the US and China, the result of a trade war brought about mostly by supply chain disruptions related to the COVID-19 pandemic.
Reports in May 2020 that the Trump administration was in talks with Intel, TSMC, and Samsung about building US chip factories proved true. In 2021, with a new president and Biden administration, these talks are persisting.
The reason a technology trade war broke out between the US and China is because the US imposed a 25 per cent tariff on $34 billion of Chinese imports in 2018. There has been bad blood ever since with threats and action on both sides.
This eventually affected the semiconductor supply chain because in 2020 the US turned to export restrictions targeting the semiconductor supply chain to safeguard critical infrastructure in the telecommunications sector. This followed a 2019 ban on the Chinese company Huawei for “national security reasons”.
For example, one of the consequences of export restrictions was that American firms were cut off from chips made by China's Semiconductor Manufacturing International Corporation - the third largest chip maker in the world with 11% market share.
Local production problems
Factory shutdowns due to natural disasters, bad weather and the COVID-19 pandemic have caused semiconductor supply chain issues.
Most of the world’s semiconductors are manufactured in Taiwan. Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, has a 28% market share. The second largest, UMC, also based in Taiwan, has a 13% market share.
Taiwan is experiencing serious water droughts in 2021. Millions of tonnes of water are required to manufacture semiconductors every week. Taiwan Semiconductor Manufacturing is having to bring water in on trucks and UMC are doing the same. This has caused significant drops in manufacturing efficiency.
The US is also experiencing shutdowns. NXP Semiconductors had to shut its plant in Austin, Texas, due to winter weather in February 2021.
Factory shutdowns cause order backlogs and extended lead times. Orders persist and pile in whether a factory is down or not. This squeezes supply chains, causing a shortage.
How long will the semiconductor shortage persist?
We expect the semiconductor shortage to persist through 2021 but ease towards the end of the year as demand for electronics chips decreases as COVID-19 lockdowns end. This will cause a shift in supply from electronics semiconductors to automotive semiconductors which will provide the industry with a much-needed equilibrium.
The world’s largest semiconductor manufacturers - TSMC, UMC, SMIC, Samsung, Intel, SK Hynix - are investing in increased output. Many investments were in the pipeline as early as 2019 and are expected to yield results at the end of 2021.
Right now, there is a serious imbalance in the demand for semiconductors, one that our existing infrastructure is not built to cope with. This imbalance will ease over time.
How can supply chains continue to meet demand?
If you have been impacted by the semiconductor shortage you can meet demand by partnering with an electronics components distributor like us.
We specialise in the procurement and delivery of semiconductors and parts for a wide variety of industries from the world's leading manufacturers. You can find out more about what we do here. Email us if you have any questions.
24 March 2021
MLCC supply is beginning to tighten?
Multilayer ceramic capacitors (MLCCs) are used in many electronics from smartphone screens to laser guidance systems. There was a prolonged lull in demand for MLCCs stretching from 2019 through to 2020, however supply is now tightening and lead times for new components are extending.
This has caused some concern with those who use MLCCs to manufacture products. Will supply continue to tighten? When will it let up? These are good questions. The answer lies in understanding why supply is tightening.
Demand for MLCCs is tightening for several reasons:
- Demand from the automotive sector is increasing
- Demand from the communications and transport sectors is increasing
- Global inventories are depleting
- Supply chain challenges due to the coronavirus pandemic
- Manufacturing bottlenecks due to facilities running at maximum capacity
The main reason for supply tightening is an increased demand from the communications and transport sectors. These sectors consume over half of the world’s MLCC supply and the rollout of 5G is accelerating demand.
The global automotive market is also a big consumer of MLCCs. MLCCs are being used extensively in modern cars. Applications include in battery management, chargers, heater controllers and energy converters. Electric cars use MLCCs because they are reliable and can be surface mounted directly to boards.
Inventory management has been a difficult task what with 2020 throwing COVID-19 into the works. This hit the MLCC supply chain like a train. Demand dropped off. This led to suppliers correcting inventory levels and sometimes overcorrecting. When demand increased towards the back end of 2020, supply chains got exposed.
It is difficult to correct inventory when not enough MLCCs are being made. For every 10 that are made 8 get put into use immediately. This leaves little fat left.
Increasing lead times
All of this means increased lead times for MLCCs. Many electronic components suppliers and distributors have them on back order. Some types of MLCC have lead times extending over several months (a long time in a supply chain).
For example, large case (≥ 0603) low-CV commercial-grade MLCC lead times are around 22 weeks. This is a very long time. The only units that are in good supply are small case size (≤ 0402) low-CV commercial-grade MLCCs which are available now.
How can you meet demand?
As 2021 gets underway, we predict that MLCC supply will tighten. Inventories will get stretched and manufacturers will struggle to get a hold of the components they need. Now that you know this, you can prepare.
The best way to assure a healthy MLCC supply is to work with a global distribution partner like us. When you need to source hard-to-find electronic components quickly because of allocation, long lead times, obsolescence, or quality issues, we are here to help. We will work with you to source the MLCCs you need. Go to our home page to use our component search tool and enquire with us today https://www.cyclops-electronics.com/.
We work with all industry sectors, including the communications, transport, and automotive sectors, to source electronic components. We specialise in the procurement and delivery of electronic components and parts with on-time delivery.
23 September 2020
Cyclops September COVID-19 lead times update
Cyclops September COVID-19 Lead time Update
COVID-19 and Electrical component manufacturer lead times update
As we enter another global spike in COVID-19 more uncertainty rises in its impact it could have on electronic global supply chains and manufacturers.
Manufacture Altera has had an increase in lead times to 15-16 weeks this is due to the demand from the server market. Analog devices have reported their lead times are more than 20 weeks on some parts, this is due to low capacity of ASP materials for medical parts.
Linear Technology have reported they are extending their LTM lead times to 20-24 weeks, while their LT series lead times currently stand at 16-20. LT1 and LTC1 are also unstable. Consequently, the company reported that parts used in medical equipment are experiencing unstable lead times, like Analog this is likely due to the impact of Covid-19 and the demand for medical supplies. NXP factories are experiencing wafer shortages and lack of production capacity. Their MPX/Sensor series has spiked to 26 weeks, the market price has risen by 20% this is a result in the sensors being used in medical treatments.
Maxim Integrated has announced due to the recent lockdown of Maxims Philippines factory has caused delays and lead times are remining at 14-16 with backlog unable to be pulled in. Similarly, company Microchip lead times are stretching to 16-20 weeks this is due to the limited factory capacity due to COVID-19. OMRON Micro switches are experiencing stretched lead times and increase in pricing particularly effecting the D2FC series. Lead times are now around 14-20 weeks. ROHM plants in Philippines are currently working at 50% due to COVID-19 quarantine.
AVX tantalum caps and F series parts are expecting shortage, the lead times have increased to a staggering 30-40 weeks, this has led to AVX not accepting lead time-based orders.
Need quicker lead times?
We are experiencing an increase in lead times due to COVID-19 as seen above manufactures are struggling to produce the mass quantity due to lock downs and shortage of staff.
We at cyclops electronics are here to provide those hard to find components in these challenging times. To search for your components please click here. Or email firstname.lastname@example.org for enquires.
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