Technology has accelerated at a rapid pace. And in today’s market, technology means electronics — even more so with the explosion of the Internet of Things smart technologies. As a result, the demand for electronic components has risen rapidly, and component producers have struggled to meet the demand, causing an electrical panel shortage. According to Electronics Weekly.com, the Electronic Components Supply Network (ECSN) advises sales of electronic components in the UK rose 17 percent in 2017.
Shortages of raw materials like switchgears and cables, along with manufacturer capacity issues have also contributed to the shortage. Large semiconductor companies have been merging, resulting in the cutting out of low-margin lines and eliminating overlapping production. This has placed increasing strain on the electrical component supply chain.
Another issue is that the onset of obsolescence of older electrical components is much more rapid, meaning suppliers are receiving much larger orders as companies attempt to stock up on parts that are going out of production.
The result of all this is that electronic component manufacturers simply have not been able to produce enough components to meet the demand. What does this electrical component shortage mean for the industry as a whole?
The most obvious effect of electrical component scarcity is a significant increase in lead times for orders requiring electronic components. Current lead times are estimated to extend to 30 weeks or more, with some orders not expected to be filled for another year. If not planned for appropriately, that kind of wait time could put some companies in certain industries at a competitive disadvantage and be disruptive for the development of military spending projects.
This type of demand for electronic components is hardly new, but it has never been as intense as it is right now. According to the President of Electronics Marketing for Avnet, Inc., Chuck Delph, “In general, we’re seeing the same behaviors that we’ve experienced during other constraint cycles. The one difference is that although there have been some price increases by the suppliers, they haven’t been as pervasive as in previous cycles. We haven’t experienced any supplier pushback on our demand, and we continue to work closely with our supplier partners to support our customers’ needs during this constrained period.”
Although suppliers and customers are working together to succeed despite the electronics component shortage, these shortages ultimately translate to longer lead times and higher costs throughout the supply chain. There has been upward pressure on prices from suppliers as a result of the scarcity of electronics components.
Some companies use counterfeit electronic components to cut costs and lead times, but this is a mistake. Verifying the quality of counterfeit electronic components is virtually impossible, and they may fail unexpectedly and provide the company with little recourse. In addition, the company may run into legal issues from buyers who expect that their products are made with approved components.
If you use counterfeit electronic components for military applications, you may have a problem, as it is unlikely that those components or the resultant project will meet MIL-Spec standards. It is best practice to avoid counterfeit parts by using OEMs or OEM distributors and having a counterfeit avoidance plan in place.
So what, then, is the best solution to this issue?
Most experts agree the best approach is to be prepared with as much planning, as far into the future, as possible. Many military projects have a large reserve of available funds, so investing that money in long-term R&D, allowing you to order your components very far in advance, is wise. Monitoring current trends in the electronics industry and making educated predictions about where they are headed can assist you with this approach.
A planning stage that maps out your project well in advance can eliminate or greatly minimize the problem of long lead times, hopefully until the current crisis is over.
Another alternative is to seek additional vendors. Vetting an electrical components vendor can be a time-consuming process, but if it can significantly increase your pool of potential component sources, it will usually be well worth the effort. Those new vendors who are eager to secure your business may even be able to offer reduced prices or other solutions to your electronic component problems that can help you right now.
No matter where you are in dealing with your electrical component challenges, you always want to be sure you have a reliable, high-quality source of power supply products. We build all of our power supplies with the highest quality electronics components because when your equipment is relied upon in the field, you can’t afford to cut corners.
That’s why you need ACT for all your power supply requirements. We are a leader in the industry in power supply production, with a full range of power supply products to meet your needs. Our team has the engineering know-how and years of experience that enable us to design just about any power supply product you need for specific applications, even on a larger scale.
Our power supply solutions are suitable for all industries but are also military-grade solutions. These are power supply products you can count on. We have provided power supply products for all US military branches, and we’d be proud of the opportunity to work with you on a solution for your next application.
If you need to order power supply products for your electronic devices or would like to learn more about who we are, what we do, and what we sell at ACT, please get in touch with us today.