Ups and downs of electronics distribution

Jon Barrett Electronics Sourcing
Jon Barrett, Managing Editor, Electronics Sourcing

I’ve come to the decision that the electronics industry is like no other when it comes to cyclical behavior. Just consider the cost of building and operating a leading-edge semiconductor fabrication plant with the retail price of the individual components it produces. Is there another comparable example? Then, consider the time it takes to design and manufacture a new semiconductor device compared with its expected life?

With these and other variables, it is hardly surprising that supply and demand essentially never match. There is little point in distributors rejoicing in a buoyant market as demand starts to outstrip supply, only to be plunged into a fight for survival twelve months later. The average is what is important.

Given the above, can the ups and downs of the electronics industry ever be smoothed. Personally, I think they can and there are many vectors. For this leader I’ll concentrate on big data and AI.

One argument I’ve heard is that too many supply chain decisions are based on emotion rather than fact. Switching to fact-based decision making is fine, provided you have some facts in the first place. If I buy a pack of batteries in a high street retailer, surely that electronic transaction should, within milliseconds, impact an order profile at

a remote mineral mining operation. Is this fantastical thinking? The data already exists, methods to join the data also exist and AI is surely capable of interpreting the data and making fact-based decisions.