Affected by economic/political situation as well as uncontrollable events, components shortage becomes a common supply chain risk. And the unbalance between supply and demand is the major factor causing electronics components shortage.
Kamran Malek, vice president of Advanced MP Technology noted supply chain is prone to volatility when new products enter market or component manufacturers become conservative and cut back production to ensure no excess inventory. However, with the launching of new products, the needed parts will rise significantly, leading to raw material shortage. At this moment, unbalance between supply and demand comes out.
“Recently, three categories of electronic parts will be in shortage: first,
memory chips. Due to the Hynix factory fire in Wuxi, memory chips will see material shortage and price rising in short term. Second: ATMEL ARM chip. The closure of ATMEL’s chip fab in France would result in the production halting of some ARM wafer in short time. Third: military chip. Currently, international situation is somewhat turbulent; war preparation will lead to the increasing demand for military chip,” said Sun Jingming, the CEO of Shenzhen Hi-Hong.
Predication and precaution
Usually, risk is unpredictable and uncontrollable, so risk reduction draws attention. “Manufacturers should first corporate with a reliable independent distributor. Because relying on first-tier suppliers, but not having use of independent distributors’ extensive experience and expertise in the open market, would make them at a disadvantageous position in front of supply chain disruptions,” said Choon Byun, President of TU Fei (Smith & Associates) in Asia Pacific region.
He also added OEM and contract manufacturers can make preparations via cooperating with other reliable channels for component procurement.
“We will increase the sample libraries and stocking, improve production line and quantity; would more actively communicate with customers about production, and get priority support from both original and agents to avoid emergent situations,” said general manager of operations at Pioneer Electronics Co., Ltd, Xu Hui.
In terms of some natural factors, demand blowout as well as original control capacity, manufacturers should know the trend, keep abreast of industry information, and long-term tracking and summary.
Guo Junya, the general manager of Sigma Technology introduced “Our company has own intelligent service information. Through collection, edition and conclusion of media and informal electronic information, we can know the direction and habits of original manufacturers, to predict market.”
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supply chain, component shortage, parts shortage, skills