Investing in additional capacity

TTI Americas’ president, Don Akery

TTI Americas’ president, Don Akery, looks at factors impacting customer growth and a return to normal lead times.

As we begin 2022, strong customer demand will remain the single largest driver of overall growth in the electronics supply chain. However, it will also continue to be the number-one driver of supply chain constraints. Alongside continued high demand for components, extended lead times for those components are the second biggest factor impacting an otherwise strong business climate.

We’re continuing to see strong demand across most customer segments. Transportation, industrial, military/defense and communications are showing the strongest booking growth. Commercial air—while down for most of 2021—has begun to recover and we expect that recovery to continue at a slow, gradual pace through 2023. 

In addition to elevated demand our biggest supply chain concern remains in worldwide logistics and transportation delays. We expect the shortage of air freight capacity, delays at ports, railway bottlenecks and unpredictability around ground freight will continue through most of 2022 and into 2023. Transportation costs will remain at elevated levels until these bottlenecks are resolved.

For these reasons, we expect current supply chain issues to continue through the first half of 2022, leading to some improvement in lead times during the second half of the year. 

Our suppliers are delivering more products since increasing output and investing in additional capacity. We expect those trends to continue throughout 2022.