Showing posts for January 2022
26 January 2022
Electronic component market to see continued growth by 2027
The electronic component market is set to see continued growth over the next five years, with projections estimating greater demand than ever.
Several forecasts have converged with the same conclusion; demand for components is set to rocket as the world adopts more advanced technologies.
This article will explore the latest research papers and market analysis from reputable sources. We will also explore why the demand for electronic components is set to soar and the supply chain's challenges.
Global components market
The market analysis covered by Market Watch predicts that the global electronic components market will reach USD 600.31 billion by 2027, from USD 400.51 billion in 2020, a compound annual growth rate of 4.7% from 2021.
Active components market
Another market report, this time looking at active electronic components, predicts the active electronic components market will reach USD 519 billion by 2027 (£380bn pounds, converted 12/01/22), a CAGR of 4.82% from 2021.
Passive and interconnecting components market
According to 360 Research Reports, the passive and interconnecting electronic components market is projected to reach USD 35.89 billion in 2027, up from USD 28.79 billion in 2020, a compound annual growth rate of 3.2% from 2021.
Semiconductor wafer market
According to Research and Markets, the global semiconductor wafer market is predicted to reach USD 22.03 billion by 2027, rising at a market growth of 4.6% CAGR during the forecast period starting from 2021.
Dynamic Random Access Memory (DRAM) market
Market Reports World predicts the global DRAM market will see extreme growth, growing at a CAGR of 9.86% between 2021 and 2027. The market was valued at USD 636.53 million in 2021 and will grow to nearly USD 700 million by 2027.
Why is component demand set to increase so much?
The world is undergoing an extreme technological transformation that began with the first computers. Today, electronics are everywhere, and they are becoming ever more intricate and complex, requiring more and more components.
Several technologies are converging, including semi-autonomous and electric vehicles, automation and robotics, 5G and internet upgrades, consumer electronics, and smart home appliances like EV chargers and hubs.
This is a global transformation, from your house to the edge of the earth. Electronic components are seeing unprecedented demand because smarter, more capable devices are required to power the future.
What challenges does the supply chain face?
The two biggest challenges are shortages and obsolescence.
Shortages are already impacting supply chains, with shortages of semiconductors, memory, actives, passives, and interconnecting components. We are a global electronic component distributor specialising in hard to find and obsolete electronic components. Email your enquiries to us today at Sales@cyclops-electroncis.com. Our specialised team is here to help.
As demand increases, supply will struggle to keep up. It will be the job of electronic components suppliers like Cyclops and electronic component manufacturers to keep supply chains moving while demanding increases.
Obsolescence refers to electronic components becoming obsolete. While some electronic components have lifespans of decades, others are replaced within a few years, which puts pressure on the supply chain from top to bottom.
In any case, the future is exciting, and the electronic components market will tick along as it always does. We'll be here to keep oiling the machine
19 January 2022
How Can Companies Combat the Electronic Components Shortage?
Electronic components shortages show no signs of abating, fuelled by growing demand for electronics, limited availability of raw materials, soaring manufacturing prices and lingering COVID-19 disruptions.
Shortages have hindered manufacturers since 2018, but things came to a head in 2020 with the COVID-19 pandemic disrupting supply chains.
The pandemic created an imbalance in supply chains, with demand for many components, from chips to actives and passives, outstripping supply. The question is, how can companies combat the electronic components shortage?
Partner with a distributor
Electronic component distributors occupy a unique position in the supply chain, representing the manufacturer and customer. Distributors work for both parties to move components up and down the supply chain.
The benefit of working with a distributor is that your company will be in the mix for components not available through traditional channels.
For example, we specialise in the procurement and delivery of electronic components and parts for a wide variety of industries from the world's leading manufacturers. We can help you beat allocation challenges and long lead times.
Diversity is the key to strengthening your supply chain. You need multiple sources for electronic components. It's a good idea to have retail and distribution channels, so you have several routes should one supplier channel fail.
Diversity can also be found in geography. A supplier in your home country is essential, but so are suppliers close to the manufacturing source.
Expand storage capabilities
If your company can expand its storage capabilities for essential components, this is the simplest way to combat shortages. By storing large quantities of components, you create a supply separate from the chain.
The risk with expanding storage is procuring more components than you need, resulting in oversupply problems that incur heavy losses.
Source equivalent components
When components are unavailable, you can specify equivalents that meet your performance and financial specifications. Equivalent components perform the same job as your original components, but another company makes them.
A simple example is Samsung, which uses its own Exynos chip or a QUALCOMM chip in the same smartphone model depending on where the smartphone is sold.
Visibility and proactive planning
Supply chains are complex beasts that require visibility to manage. Monthly stock updates are no longer sufficient; to combat shortages, you need real-time supplier updates and an inventory catalogue to keep track of supply.
You can proactively plan component shipments and tap into price dips and new inventory when you have visibility over total supply.
When electronic components become obsolete, manufacturers who haven't planned for it scramble to find components that will work. This inevitably creates bottlenecks in the supply chain as many big companies compete for orders.
Obsolescence is predictable because all electronic components have a run date, and manufacturers update lifespans with inventory cataloguing. You can avoid shortages and soaring prices for rare parts by predicting obsolescence.
Have shortages? Speak to us
We're here to help you deal with electronic component shortages. Contact us here.
13 January 2022
Will continued global Covid measures extend electronic component shortages?
Continued global Covid measures will likely extend electronic component shortages, hindering manufacturers for several years.
The coronavirus pandemic has reshaped the global economy irreparably. Demand for electronic components has shifted, supply chains are broken, and new, more infectious variants threaten to bend normality further.
It looks like the world is running out of electronic components, but there’s more to shortages than meets the eye.
The coronavirus pandemic is the biggest reason behind component shortages. With this single statement, we can deduce that shortages will subside when the pandemic subsides, freeing up supply chains through fewer restrictions.
However, we know the coronavirus isn’t going anywhere, and its persistence and ability to evolve means we have to learn to live with it.
Add raw material shortages, soaring prices, low investment in new manufacturing facilities, and geopolitical issues related to supply and demand. Now we have a recipe for several years of component shortages.
How covid reshaped supply chains
In May 2020, the first wave of the coronavirus pandemic hit most of the world. Countries locked down, and most sectors of the economy suffered.
Demand for some categories decreased, while demand for others increased. For instance, demand for vehicles evaporated while demand for home computers soared, creating an imbalance in the supply chain.
Estimates suggest that vehicle sales fell by 50% or more within a single month. In response, vehicle manufacturers scaled backorders for components.
At the same time, demand for electronics chips and parts soared as more people spent time working from home.
When demand ramped back up for vehicles, there weren’t enough components to serve them and electronics. This is a story shared by multiple industries, with supply chains broken by supply and demand imbalances.
The matter wasn’t helped by local and national lockdowns, circuit breakers, new variants, and mitigating problems like floods and climate change.
There is no easy solution or fast fix
The pandemic has also caused prices for common and rare earth metals to explode, increasing over 70% since the start of 2021 for some metals. These prices are made even worse by soaring inflation.
Trying to build supply chain resilience during the coronavirus pandemic is like trying to build a house of cards on a jittering floor. Just when you think you have it, something comes along that knocks it down, and you have to start over.
The simple fact is that the world needs more factories to make components, and it needs to get a grip on inflation. The Covid pandemic is not going away, although the virus appears to be getting milder, which is a good sign for the future.
You can bolster your supply chain by working with an electronic components distributor like us, increasing your inventory, and quickly moving to equivalent components when you experience shortages of active and passive components. Email us today with your component inquiries email@example.com
Although global Covid measures are likely to extend electronic component shortages, there is no reason why they should stop you from doing business.
Enter Electronic Component part number below.