© filipefrazao84 dreamstime.com_ Components | June 16, 2021
Component shortage - an evaluation of the situation
The component shortage takes control of most processes in the electronics industry. As Head of Strategic Purchasing at EMS service provider A+B Electronic, Marcus Hartwig has to deal with the subject on a daily basis. “To say the time is about to run out, that would have been right six months ago. It is high time.”
He gives an overview of the situation and shows what companies can do now that rely on assembled printed circuit boards. The lack of the smallest electronic components is already causing a standstill for large manufacturers in the automotive industry. If the big customers in the industry feel that way, then you can imagine what's going on in the market itself. Because if the supply can’t be ensured even there, everyone knows that the hour has struck. There are always ups and downs in the EMS industry, regardless of whether it is about demand or supply. Marcus Hartwig has been with A+B Electronic for 20 years and has already experienced a few crises. However, he has not yet gone through a crisis like the current one with active components. Manufacturers' delivery times are skyrocketing, as are prices. If you get a delivery date of almost 70 weeks, the planning is already at the end of 2022. Allocations also only bring small partial quantities into production. “The market is going crazy, there is no other way of saying it. To describe the situation as it is at the moment. I think we can speak of the biggest crisis in this industry”, summarises Marcus Hartwig from A+B Electronic. What are the problems and reasons for the shortage? But according to him, the shortage cannot be blamed solely on the current pandemic. It acts as a kind of fire accelerator, but the crisis is rather the sum of many unfortunate pieces of one puzzle. Transport routes are made more difficult by the lack of air traffic, and the industry is struggling with enormous price roses for components. Growing segments such as e-mobility, entertainment electronics or 5G are making demands on many technical components, while supply does not increase to the same extent as demand. And these are just a few problems in the current situation. As a strategic buyer, Marcus Hartwig also sees difficult situations with customers: “There is a lack of understanding for the rising prices and the long delivery times. Of course, you can still implement orders at short notice in individual cases, but in these cases the suppliers can be paid princely." Even with a realistic view, the problem cannot be remedied in a short term. Rather, it will accompany the electronics industry well into 2022. Many technical areas that were forced to sleep during the pandemic will have a lot of catching up to do. The situation cannot relax quickly. How should customers of EMS providers act now? So how do you react as a company that is absolutely dependent on EMS services? The profession buyer from A+B Electronic has a answer here: “From my point of view, the only way is to order as early as possible. Customers should cover all their needs, better today than tomorrow. So really everything that is visible and justifiable from the customer's point of view. You have to accept the rising prices. At this point it's all about minimising the risk. For us, the most important thing is that our customers receive their assemblies and thus can also sell their own products." The situation is difficult for many companies. You have already been shaken by the Corona crisis and hesitate to make advance payments for 1-2 years if the sale of your own products is not yet foreseeable. But it is also clear that customers who do not take action now will have to survive long dry spells. It's a risk assessment: Can my company handle it or should I order long-term in order to proactively counter the problems? Proactive behaviour also helps EMS service providers such as A+B Electronic in planning and production. Requirements can be registered at an early stage and changes can be addressed directly with the customer developers. What alternatives are there for the components? How can problems be addressed? This should be clarified if possible before the first vacancies occur. Marcus Hartwig closes with positive words: “We won't leave anyone out in the rain, because after all we are together in a crisis. We can only get out of there together as well."
AI chipmaker Hailo collaborates with Renesas The collaboration is said to result in a powerful and energy-efficient processing solution enabling advanced driver-assistance (ADAS) functions and automated driving (AD) systems in motor vehicles.
Mediatek to open design center at U.S. university Fabless chipmaker Mediatek announces commitment to support its first Midwest semiconductor chip design center in West Lafayette, Indiana.
Japan’s next chip challenge: finding engineers Japan, along with a number of companies, has invested a lot to build up the country’s domestic chip industry. The next challenge is to find a multitude of engineers to run and operate it.
Dexerials and SemsoTec to set up an optical solution center Dexerials Corporation, a provider of leading-edge technologies, materials, and devices for smartphones, automobiles, and other products, and German automobile design house SemsoTec Group, will jointly establish an Optical Solution Center for leading-edge In-Vehicle HMIs in Cham, Germany.
90,000 square metres – Arrows new Dutch distribution centre Arrow recently opened its new primary distribution centre (PDC) in Venlo, the Netherlands. The new centre is one of the company’s largest warehouses globally and replaces the existing facilities in the region and also provides increased capacity for future growth.
Nanya breaks ground on new fab in Taiwan Nanya Technology Corporation has broken ground on its new semiconductor fab in New Taipei City’s Nanlin Technology Park. Once completed, the NTD 300 billion (EUR 9.6 billion) investment will result in an advanced fab with a double-deck cleanroom.
First tool arrive at GlobalFoundries new Singapore fab One year after breaking ground, GlobalFoundries can celebrate a significant milestone on the path to expand its semiconductor manufacturing capacity in Singapore. The first tool has been moved into the company's new facility on its Singapore campus.
Sivers Semiconductors completes the integration of MixComm Swedish Sivers Semiconductors says it has completed the integration of MixComm, creating a challenger in 5G, SATCOM and radar.
Inventronics to acquire ams Osram digital systems business Inventronics has entered into an agreement to acquire the Digital Systems business in Europe and Asia from ams Osram, a global leader in optical solutions.
Allied Motion Technologies acquires Airex Allied Motion Technologies, a designer and manufacturer of precision and specialty controlled motion products, has acquired Airex, LLC, a privately-owned company providing high precision electromagnetic components and solutions.
Arrow opens new distribution centre in the Netherlands Arrow Electronics has opened a new primary distribution centre (PDC) in Venlo, the Netherlands. The PDC will function as a key hub serving all customers of Arrow’s electronics components business in Europe.
Smith adds 30,000 square feet of space in Houston The distributor of electronic components has officially opened its new global services hub in Houston, Texas. The new location adds 30,000 square feet of space for the company’s services.
Samsung invests in Israeli AI systems & semiconductor company Samsung Ventures has made an investment in NeuReality, an Israeli AI systems and semiconductor company.
Swedes develop new method for manufacturing semiconductor components AlixLabs from Lund, Sweden, has developed a new method for manufacturing semiconductor components with a high degree of packing, eliminating several steps in the manufacturing process - Atomic Layer Etch Pitch Splitting (APS).
Kinetic closes asset purchase agreement with Gain Semiconductor Analog and mixed-signal semiconductor company, Kinetic Technologies, has completed the acquisition of certain assets of Gain Semiconductor Incorporated.
Socionext relocation of its US HQ to Milpitas Fabless SoC supplier, Socionext America Inc. (SNA), has relocated its US headquarters to a34,000 square foot single floor building in the City of Milpitas.
TF-AMD expands with new manufacturing site in Malaysia TF-AMD Microelectronics plans to expand its manufacturing facility in Penang with the construction of a second site at Batu Kawan Industrial Park, Penang. A move set to create more than 3,000 new jobs.
Ericsson boosts distribution center in Malaysia Swedish telecom company, Ericsson, has commissioned a new facility at the Kuala Lumpur International Airport (KLIA) that will expand its regional distribution capacity and role of Malaysia in the company.
Applied Materials acquires of Finland-based Picosun Applied Materials has acquired Finnish atomic layer deposition (ALD) technology specialist Picosun Oy.
Melexis adds new manufacturing and R&D space in Bulgarian In an update on LinkedIn the company states that it has officially opened ints new “high-tech” building in Sofia, Bulgaria. Melexis says that this new facility will contribute to Bulgaria's presence in areas such as microelectronic, automotive, and innovation.
Arduino finds backing among giants Open-source company, Arduino, plans to expand its portfolio of hardware, software, connectivity and developer tools for professionals. To reach its goals the company launched a Series B financing round, raising USD 32 million from the likes of Bosch, Renesas and ARM.
Farnell expands Toshiba portfolio to support design engineers The global distributor says that it has strengthened its global partnership with Toshiba Electronics Europe GmbH (Toshiba), resulting in a significant product line expansion and increased stock holding.
SK hynix pick Lam solution to enhance DRAM production SK hynix has selected Lam Research's dry resist fabrication technology as a development tool for two key process steps in the production of advanced DRAM chips.
Altair expands and acquires Concept Engineering Computational science and artificial intelligence company, Altair, has acquired Concept Engineering, a provider of electronic system visualization software.
Infineon liquidating its entity in Russia One hundred days after the start of the war, Infineon Technologies reaffirms its solidarity with the people of Ukraine. The company states that it made the decision to liquidate its entity in Russia in March already, which is currently being executed.
Newport Wafer Fab deal called-in for national security assessment The acquisition of the UK’s UK's biggest chip plant – Newport Wafer Fab – has been called in for a full national security assessment.Load more news