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Showing posts for February 2021


24 February 2021

Electronic component supply chain efficiency. Will we see another increase in supply and demand due to COVID-19 this year?

supply chain

In 2020, the electronics components industry saw both increases and decreases in supply and demand depending on where you look.

For example, demand for semiconductors that enable servers, connectivity and cloud usage skyrocketed due to stay at home workforces. Meanwhile, demand for semiconductors used in the automotive industry declined as car sales fell.

In other words, the supply and demand for electronic components was different across various sectors. Now that 2020 is behind us, 2021 is looking to follow much the same path as we continue to contend with COVID-19.

However, there will be one big difference - most of the sectors that had reduced demand for components in 2020 will ramp up their purchase orders in 2021. This is the result of economies opening up and companies getting back to operations.

Supply and demand in 2021

We believe the electronic component industry will witness a significant increase in supply and demand in 2021. There are a few reasons for this. The first is that most industries hampered by the COVID-19 pandemic will open up. Car manufacturing is the big one. This will fuel a surge in demand for semiconductors and sensors.

2021 will also play host to cyclical sectors and several tailwinds. 5G, Wi-Fi 6, AI, robotics, cloud, communications, edge computing and AR / VR are the big ones. These technologies will fuel demand for new electronic components.

Supply constraints will persist

Factories will have to ramp up production to meet demand. 2019 was a bumper year for electronics and a lot of infrastructure was built to meet demand. 2020 stuck a fork in the road, placing higher demand on certain components. In 2021, demand will return to a form of previous normality, increasing supply constraints.

We expect supply constraints of components to grow in 2021. Manufacturers will struggle to get a hold of the parts they need.

This will increase the need for partnerships with electronic component distributors like us who are ingrained into the fabric of the industry.

Things will get better over time

With the global rollout of the coronavirus vaccine in place and manufacturing sectors protected from Government shutdowns in most countries, 2021 should be a year where we see supply constraints reduce over time.

Supply and demand will get back to 80% normality toward the end of 2021. 2022 should be much better. This assumes we get to grips with this horrible virus.

In the meantime, tailwinds will continue to fuel demand for electronic components in sectors like AI and edge computing. COVID-19 has only accelerated digital transformation in most sectors. This is a powerful tailwind.

Ultimately, the demand for passive and active components will increase in 2021. You can make sure you have access to the components you need by partnering with us. We specialise in the procurement and delivery of electronic components and parts for a wide variety of industries from the world's leading manufacturers.

Tags: supply chain efficiency semiconductors covid-19 supply constraints


17 February 2021

How does recycling electronics help create sustainability within the industry?

recycling

Thanks to advancements in material science and recycling technologies, it’s possible to recycle around 80% of most new electronics. For example, the smartphone in your hand or pocket has around 80% recyclable components.

The most valuable components in electronics are rare and precious metals. The quantity of these metals in your phone is tiny but the number of phones (and other electronics) that enter landfills is huge. This creates a lucrative opportunity for recyclers to invest in processes that can extract the most valuable components efficiently.

Recycling in the electronics industry

Recycling electronics is important to not only reduce e-waste, but also our dependency on the mining and manufacturing of new materials. 

The electronics industry is at odds with environmentalists because the industry that’s pioneering solar and renewable energy technologies generates a lot of e-waste. You can’t have it both ways. If you want technology to fight climate change, it first has to advance to a point where it becomes neutral and self-sustained.

Mass recycling is the process that will enable this in the future. For now, it is a stop-gap to minimise the electronics industry’s impact on the environment. And it’s working, with 15% of e-waste recycled globally in 2019. This figure is rising by 2-3% per year. In 2030 we expect the global e-waste recycling rate to hit 50%.

European legislation requires every manufacturer and producer to arrange and finance the collection, treatment, recycling, and disposal of WEEE (Waste Electrical and Electronic Equipment). This is a positive step. In the future, we want to see 100% recycling efficiency, although this will require different materials to those used today.

Excess inventory management

Another area of the electronics industry where recycling is important is excess electronic components. These components are not assigned for manufacturing and have no purpose in production. They take up space and are depreciating assets.

These components tend to be discarded and written off. However, recycling is not the best thing for them. The best thing for them is putting them back into production. The old phrase “One man’s trash is another man’s treasure” springs to mind.

This process is known as excess inventory management and it requires an electronic component distributor to purchase unwanted stockpiles of components. These stockpiles are then re-sold through a distribution network.

This provides a few benefits to the seller:

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

Over at our sister company, Cyclops Excess who specialise in the purchase and management of excess stock that has been identified for disposition. This process turns unwanted electronic components into cash and introduces new revenue streams for you.

If you have unwanted excess stock contact them today, Excess offers three buying options to suit you and your business needs. Call 01904 415 415,  email our team hello@cyclopsxs.com or visit the website here https://cyclopsxs.com/ 

Where does excess inventory end up?

Most excess inventory ends up on the production line with manufacturers and OEMs to create new products. This puts the components into production and significantly increases the time from manufacture to end of life.

Other components can find no end-user. In this case, the components are sent to specialist recycling centers that purchase the components as scrap. Around 10% of excess inventory is sent on for recycling. The majority enters production.

 

Tags: recycling e-waste sustainability electronics climate change environment waste electrical and electronic equipment


10 February 2021

What does 2021 hold for the electronic components industry?

componentThe coronavirus pandemic hit the electronic components industry like a freight train, knocking supply and demand for six. Now that 2021 is upon us, economies are starting to open up with pinned hopes on vaccines. This could be a banana skin, but 2021 should be a calmer year overall. The world should get back to business.

2021 in a nutshell

The avenues shut down for raw materials and shipments of electronic components will begin to open back up in 2021. This will create a healthier supply and demand market than 2020. Some issues will remain. Component shortages are likely, and this is especially true of newer parts that are found in connected devices.

Semiconductors will lead demand

The semiconductor industry saw a significant increase in global chip demand in 2020 and this will only continue in 2021. Cyclicity driven by 5G and Wi-Fi 6 upgrades and tailwinds like edge computing, AI and AR / VR will fuel demand.

Who will benefit most? Our money is on Broadcom, Arm, Qualcomm, Intel, AMD, Nvidia and Skyworks with TSMC winning on the foundry side.

DRAM will follow the path of semis

Dynamic random access memory (DRAM) is as essential to connected technologies as semiconductors. 2020 saw a sharp increase in recovery from the first quarter, and 2021 will exhibit a similarly healthy supply and demand situation.

Who will benefit most? Samsung, Micron and SK Hynix, who are the first, second and third largest manufacturers of DRAM respectively.

Shutdowns will continue

The risk of shutdowns of component production because of the coronavirus will remain in 2021. This will create extended lead times and supply issues. Governments may be forced to shutdown factories in localised areas.

The good news is this will become less common as the year goes on. The pandemic’s impact on production will reduce over time.

Tailwinds will fuel more demand than cyclicity

When evaluating electronic component demand, cyclicity and tailwinds are often pitched against each other. In 2021, we expect tailwinds like AI, edge computing, robotics and VR / AR to fuel greater growth than cyclical upgrades.

This is a sign of the times. The world is getting more connected and smarter. Innovation will fuel tailwinds and create booming tech sectors.

Counterfeiters will grow more prolific

One of the sad realities of electronic components is counterfeit components. They are becoming more sophisticated. As manufacturers clamber to get stock in this year, they are at a high risk of being targeted by counterfeiters.

Companies should rigorously control purchase sources, conduct quality inspections and use a trusted distribution partner to combat these risks.

Looking to the future

In 2020, the electronic components industry handled the coronavirus pandemic in an efficient and calculated manner. Supply and demand issues hit the industry, but they were solved for the most part in good time.

2021 will be calmer for several reasons: 1) We now have a lived experience of the coronavirus and know how to manage shutdowns efficiently, and 2) There is an increased need for us to get back to work and get on with our lives.

Tags: semiconductors dram electronic components counterfeiters


03 February 2021

How Cyclops helps tackle environmental issues in the electronics industry

shutterstock_1072059917

There’s no industry as polarising as the electronics industry when it comes to the environment. This is the industry that generates 70% of all toxic waste on the planet, yet it’s also the industry that’s pioneering renewable energy to address climate change.

The best way to look at the electronics industry from an environmental point of view is as a work in progress. We know that the industry is facing several environmental challenges now and in the future. The question is, how should we respond to them?

We are a global electronic component distributor, supplying electronic components to global customers. Our position in the industry has given us a unique perspective of the environmental challenges it faces. In this article, we’ll discuss some of the challenges we are facing and how we are addressing them.

Improper component storage

One of the biggest problems in the electronics components industry is the lack of environmentally-controlled storage facilities.

The biggest danger to electronic components is humidity which has to be controlled to ensure the components do not degrade. Problems like moisture absorption and contact corrosion have to be considered in storage.

Cyclops only operates environmentally-controlled storage facilities. Our facilities are designed to ISO 9001 standards. ISO 9001 is the international standard that sets out the requirements for a quality management system.

Delivery emissions

Electronic components and electronic devices are shipped via land, sea and air. Some packages find their way in transit covering several countries in a single day. This generates unavoidable emissions as a natural by-product of operating.

These emissions can be reduced or offset in a few ways. The simplest way is to always use the most efficient transit methods and logistics firms that offset their emissions. This means the sender doesn’t have to offset their own emissions.

We go with this method because it allows us to meet our environmental obligations while also ensuring a high-quality delivery service.

Electronic waste (e-waste)

Electronic waste is the biggest issue facing the electronics industry. Only around 20% of e-waste is recycled each year. The rest enters landfill. It accounts for 70% of all toxic waste on the planet, which is an astonishing figure.

Cyclops is helping to reduce the amount of electronic waste that enters landfill by putting components that would otherwise enter landfill back into use.

You’d be surprised by the number of components we save that are new old stock. We save hundreds of thousands of components each year. Many of these are rare legacy electronic components that are no longer being made.

Looking ahead

The electronics industry gave you the smartphone in your hand and the internet that connects you to this article. There’s no denying it’s an immeasurably valuable industry and our future will have more technology. That’s a certainty.

As civilisation becomes more reliant on technology, we will develop technologies that address the industry’s biggest environmental challenges. In particular, we hope to see a significant reduction in e-waste and emissions soon. For now, the future is what we make of it, and we’re optimistic about what the future holds.

Tags: climate change electronics industry electronic components cyclops electronics sustainability


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