Year of correction

IBS Electronics’ CEO, Rob Tavi

IBS Electronics’ CEO, Rob Tavi, sees a correction beginning in Q3 2022 and taking one to two-years to see improvements in the supply chain, lead times and prices

The electronics supply chain has experienced record growth in the last two-years and accelerated the global economy into a technological revolution, fueled by excessive fiscal spending ignited by the pandemic to stimulate the economy after the global shutdowns in 2020.

Global supply chain disruption, raw materials, labor and geopolitics have pushed global inflation to record numbers affecting the economy. As fiscal spending programs are being cut and interest rates rise, we are headed straight into a cyclical and global recession that will directly affect the electronics industry.

2023 will be the year of correction in the electronics industry, with allocation, lead times and price deflation that sent the sector skyrocketing in prior years. Today’s data shows the correction beginning in Q3 2022 and will take about one to two-years to improve the supply chain, lead times and prices, especially in the semiconductor and power-driven products used in advanced industrial infrastructure, EVs and cloud computing.

Manufacturers’ and distributors’ investments in technology, engineering and digital transformation over the last two years will show how they will handle the cyclical slowdown. Digitally maturing companies innovate at a far higher rate than their competitors and employees of digitally maturing companies have more latitude to innovate. That will be the separator in this decade’s electronics and supply chain industry of improving efficiency and output and communicating in real-time to their customers and partners.

The future is bright for the electronics industry, but how you adapt to implement software and technology will be the separator to long-term growth and success.