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Constrained supply challenges buyers

Buyers qualify new suppliers, share long-range forecasts and look to distributors for help in sourcing parts that are in short supply – by James Carbone. By most accounts, supply of semiconductors and other components will be constrained through the first half of 2021 and buyers at OEMs and electronics manufacturing services providers are employing strategies and tactics to make sure their companies get all the parts needed to keep production lines running. While most buyers like to have a limited number of suppliers, some are qualifying new suppliers for commodities and finding alternative parts for shortage components in an effort…

The buyer’s market for high-brightness LEDs will continue in 2021

While demand for high-brightness LEDs will grow this year, availability will remain high and prices will decline because of overcapacity. Oversupply, overall weaker demand from key customer segments and declining prices resulted in a 10 per cent decline in the high-brightness LED (HB-LED) market in 2020 as total LED revenue fell from $13.1 billion in 2019 to $11.8 billion in 2020. HB-LEDs represent about 92.4 per cent of the total LED market which declined from $14.2 billion in 2019 to $12.7 billion in 2020, according to market researcher IC Insights. “Most of the semiconductor segments have seen growth this year…

Distributors rise to the occasion in managing supply chain risk

Distributors are bearing more of the responsibility of managing risk in the supply chain, as more semiconductors and other components are sold through the channel. Helping OEMs and electronics manufacturing services providers manage supply chain risk is not a new task for distributors, but that role seems to have become more important and is now an integral part of the distribution business model. Outsourcing, shorter product lifecycles, increased government regulation, trade wars and tariffs have increased risk in the supply chain. That’s in addition to “normal” supply risks caused by supply/demand imbalances which can result in longer lead times, shortages…

Independent distributors: Expect tight supply especially earlier in 2021

Electronics buyers will face longer lead times and some shortages in the first quarter, but it is unclear how long unfavorable buying conditions will last. Non-franchised distributors say there will be limited supply for some passives and semiconductors in the first quarter of 2021 but tight supply for some parts could last through much of the year. Demand has increased as several key customer segments, which had slowed manufacturing of their products during the pandemic, have now increased production of electronics systems and are ordering more components. In addition, distributors and some OEMs have increased inventories because of uncertainty and…

Pandemic limits distributors’ semiconductor sales

Chip sales declined in the first half, but demand bounced back in the third and fourth quarters and distributors expect to post modest semiconductor sales growth for the year. When the coronavirus pandemic spread across the world, most distributors thought that their semiconductor sales would fall this year because the pandemic shut down production of electronics equipment and components. However, the severity of impact on distributors’ semiconductor business was somewhat muted as demand for chips from a range of industries increased in the second half. Many distributors now expect a modest low single-digit increase in semiconductor revenue for the year,…

Buyers may face rising prices and longer lead times in 2021

Buyers are concerned there could be more shutdowns of electronics production in 2021 as uncertainty created last year by the pandemic carries over into 2021. Possible shutdowns of component production because of coronavirus, rising prices for copper and other metals and potential shortages of multilayer ceramic capacitors, power MOSFETs and other components are some of the supply chain challenges that electronics buyers say they will face in 2021. Covid-19 will remain a front-and-center purchasing for many buyers in 2021 as the number of cases of coronavirus reached record levels in the U.S. and other countries in the fourth quarter stoking…

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