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Supply chain regionalisation and allocations

Editor’s note: Chris Hood is vice president of global purchasing for EMS provider Plexus. Electronics Sourcing North America (ESNA) recently interviewed him about the purchasing and supply chain Plexus and other electronics companies are expected to face in 2021. Q) Do you expect there to be enough production capacity for semiconductors and other components in 2021? Is there any significant risk of component shortages, allocations, or longer lead times for components? From a buyer’s perspective, there is never enough capacity. However, our team continues to leverage our robust supplier management and risk assessment tools to manage through longer lead times….

Distributors expect a rebound in business in Europe in 2021

While European distribution sales will end 2020 declining, most distributors believe business will bounce back next year as demand increases from automotive and industrial segments. The European electronics distribution business will fall about two to four per cent in 2020 due in large part to the coronavirus pandemic, but distributors expect a return to sales growth in 2021. Distribution business in Europe was down about 5 per cent in the first half of the year compared to the first half of 2019, but there were signs of improvement in the third and fourth quarters, according to Adam Fletcher, Electronic Components…

Dual and multiple sourcing helps GE Healthcare reduce supply chain risk

Having suppliers that make components in more than one region of the world also helps to reduce risk for the company. Working closely with component manufacturers and their authorized distributors, making sure there are at least two suppliers for each component and involving buyers in new product introduction are some of the strategies that GE Healthcare employs to manage supply chain risk. The company also likes suppliers to have multiple manufacturing locations for a needed component in different regions of the world. If one plant shuts down because of a natural disaster, the component will be available from other manufacturing…

Weaker demand and falling prices

However, the analog chip market will bounce back in 2021 as both demand and prices increase. Buyers can expect declining prices for analog ICs for the rest of the year and into 2021 because of overall weaker demand and ample production capacity. The worldwide analog chip market will decline 5.8 per cent in 2020, due in large part to COVID-19, which has resulted in less electronics equipment and semiconductor demand. The analog IC market will fall from $53.9 billion in 2019 to $50.8 billion, according to World Semiconductor Trade Statistics (WSTS). Analog chip unit shipments will fall 2.4 per cent…

There’s more to blockchain than traceability of parts

Blockchain will also bring efficiency, greater accuracy and streamline the exchange of information and data in the electronics supply chain. Some large electronic component manufacturers, distributors and OEMs are using blockchain to enable them to trace parts through the supply chain from the time the components are made until they are scrapped. Many other companies are researching blockchain to determine how to best use it but have not made large investments to implement it. With blockchain, an electronic ledger is created when a component is manufactured. Blockchain uses cryptography and timestamps along with QR codes and RFID tags to provide…

Some independent distributors see sales increases because of pandemic

Component demand from “essential” industries such as medical OEMs have boosted sales for independent distributors. Independent distributors say they have seen healthy demand and robust sales increases despite the slowdown in production at some global OEMs and electronics manufacturing services (EMS) providers because of the coronavirus pandemic. Much of the sales growth for independent distributors has been driven by “essential” industries such as medical equipment, mobile computers and networking equipment. “Electronic component demand has remained steady throughout the year and business has been brisk,” said Todd Burke, president, Americas for independent distributor Smith, based in Houston. However, demand has not…