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Showing posts tagged 'stock'


22 September 2021

Causes of IC Shortage

IC Component

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.

Reshaped demand

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.

Logistics

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.

Lead times

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.

Raw materials

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.

Stockpiling

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.   

Trade sanctions

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.

 

Tags: integrated circuits discrete circuits optoelectronics sensors ic shortages semiconductors logistics lead times raw materials stockpiling automotive trade sanctions integrated circuits discrete circuits optoelectronics sensors ic shortage


15 January 2021

Cyclops Electronics: What we do and how we can help your electronic component needs

cyclops electronics logo

Cyclops Electronics is classed as an electronic component distributor in the sense that electronic component distribution forms 80% of our business. However, this is only part of our operation. We actually provide a complete distribution solution, with sourcing, ordering, testing, and quality inspection included.

This ‘full-stack’ approach to electronic component distribution makes us a valuable partner to hundreds of companies around the world.

Electronic component distribution

We specialise in supplying other businesses with electronic components. We source, purchase, and fulfill component orders on our customer’s behalf. This means our customers only have to deal with us, which makes life easier.

Our customers also benefit from several service features, including:

  • Fast component search
  • Price Match Plus Promise
  • Scheduled ordering
  • Access to global supply chains
  • A seamless and easy ordering process

The true value of our service is our wide network of trusted suppliers in the industry, which includes OEMs and specialised component manufacturers. Whether our customers need a sensor that’s in short supply or a PCB board ordered in the thousands, we can deliver.

Our global distribution network enables us to source components quickly. We take full control of the process. Our customers leave us to source what they need. This relationship is results-based, and we have a very high grade so far, following over 30 years’ in the industry (Cyclops Electronics was incorporated in 1990).

Excess inventory management

We also help businesses monetize excess components. Customers with excess components can move these components on through our network. This enables our customers to reduce inventory burdens and make money at the same time.

This service has 3 main benefits:

  • An instant, positive cash injection
  • Reduce your stockholding costs
  • Reduce time spent managing surplus stock

If that sounds appealing to you, get in touch.

Electronic component testing and inspection

As part of our electronic component distribution service, we inspect the components delivered to verify their legitimacy and quality. We are members of the ERAI and have the best equipment to test components.

The purpose of testing and inspection is two-fold: 1) To verify that the components are legitimate, i.e. not counterfeit, and 2) To verify that the components are working, or that they have been manufactured to the correct standards.

With our service, our customers benefit from:

  • A One Year Quality Guarantee
  • An ISO 9001:2015 Certificate
  • Cyclops Group Inspection Process
  • Cyclops Quality Assurance Statement

In other words, we test and verify components to International Standards, and we stamp our work with a one-year quality guarantee.

How we can help your electronic component needs

We work for our customers to solve shortage and supply problems for active, passive, electro-mechanical, and other components. If you want to solidify your supply chain with greater access to electronic components, we are the partner for you. We have a rich history of success and hundreds of successful partnerships.

Fancy a chat about your needs? Call us on 01904 415 415 or email sales@cyclops-electronics.com and we’ll get back to you.

 

Tags: cyclops electronics cyclops excess distribution stock inventory management component quality inspection.


04 November 2020

How the electronic supply chain has been divided by COVID-19

supply chain

Amidst doom and gloom predictions of global economic fallout from COVID-19 and further human and social ramifications, the electronics industry is quietly confident that demand for products will not stall this year or shortly.

This makes for a morale-boosting headline, but underneath the battle lines, there is a trade war raging as a result of a divided supply chain.

Equipment manufacturers are struggling to get a hold of components and component manufacturers are struggling to make enough new components. This, the result of a virus that has thrown the world into unchartered territory and forced elected leaders into making profound decisions that have affected our way of life.

The electronics sector is healthy for now, but keeping it going has required change and intelligent thinking. This is how the electronic supply chain has been divided by COVID-19:

The battle for stock

With the production capacity for electronic components down as a result of COVID-19, it is no surprise that the components' supply chain has been impacted. Fewer components are being made, creating a shortage of stock.

As a result of this, we are now seeing a shift in behavior from manufacturers, who are component hoarding and paying over-the-odds for stock to meet demand. This has reduced the number of components available on the open market, creating a shortage, and the issue is compounded by a lack of new production.

Supply moving away from China

As a result of the coronavirus in China, which has devastated the workforce and adversely impacted the country’s social reputation, manufacturers are beginning to seek alternatives to meet the demand for electronic components.

Taiwan, South Korea, Singapore, Malaysia, the United States, Japan, Vietnam, the Philippines, and Germany are all rich manufacturers of electronic components. We are now seeing greater diversification in supply chains. This is good news for the global economy, but not so much for China and Hong Kong.

Changes in supply chain planning

COVID-19 has forced manufacturers to pivot their supply chains to boost efficiency. From being more flexible with transportation to estimating capacity and accelerating production, manufacturers are doubling up on decision-making processes.

The optimization of production and distribution capacity are key areas, so that production can continue to meet demand while managing health. Available inventory has now become a more important factor than ever too - no longer can manufacturers rely on a steady supply of components. Orders must be planned.

Closer partnerships with electronic component distributors

Pre COVID, manufacturers typically kept the procurement of electronic components in-house with a slick and efficient operation. Inventory would be automatically updated with component orders placed electronically between supplier and manufacturer.

If COVID has taught manufacturers one thing, however, it is that you can never rely on one single supplier to deliver. One failure breaks the system.

This has led manufacturers to partner with component distributors who can deliver the stock they need. The sourcing of components is being increasingly outsourced, which brings some inefficiencies, but is necessary to keep things ticking over. 

Tags: covid-19 battle for stock supply moving away from china supply chain planning partnerships with electronic component distributors electronic components


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