Aligning supply and demand

Fusion Worldwide’s president, Tobey Gonnerman

Fusion Worldwide’s president, Tobey Gonnerman, is keen to emphasize that new manufacturing facilities and fabs are being constructed and will come online in 2023

2022 came with numerous highs and lows for the electronic component supply chain. Shortages continued to impact verticals like the automotive industry but now we’re seeing markets like consumer electronics experience weak demand and excess supply. No one can accurately predict what the next year will look like but global economic downturn and inflation concerns are certainly impacting demand forecasts.

In accordance with those projections, lead times are shortening or remaining steady for manufacturers seeing a downturn in demand. Order cancellations are increasing as customers are working to align order backlog to consumer behavior. Most markets, excluding automotive, are undergoing declines in Q4 which are predicted to continue into the first half of 2023.

Product timelines are also being delayed but those projects will inevitably resume and push other commodities towards obsolescence. However, Fusion Worldwide is confident in our ability to navigate these changes and will continue to support our customers via creative sourcing solutions.

That being said, demand is expected to recover in the second half of the year. New manufacturing facilities and fabs are being constructed and will come online in 2023, which will likely improve the overall state of supply. There are still bottlenecks that need to loosen before we can accurately predict the status of lead times, but it seems certain that supply/demand imbalances will persist, just as they always have.