Communications including 5G will drive the components market
While electronics content in cars and trucks is increasing, the auto industry will continue to account for a relatively small percentage of semiconductor sales over the next five years. It’s no secret that electronics buyers in the automotive industry have been scrambling to purchase microcontrollers, power management ICs and other semiconductors because of tight supply after production of many components and finished goods slowed down last year because of the COVID-19 pandemic. Exacerbating the problem for auto industry buyers that electronics content in vehicles is rising as more electronics systems are being designed into more cars and more electric vehicles…
Business booms for high-service distributors
An increase in design engineering activity and tight supply of chips and other components is resulting in skyrocketing sales for high-service distributors. High-service electronics distributors have weathered the coronavirus pandemic with some reporting a 50 per cent increase in sales during the first five months of 2021. Most high-service distributors focus on design and sell small quantities of parts to engineers designing new products. Design activity has increased significantly in the first half of 2021. However, high-service distributors also report they are seeing strong sales from buyers at OEMs and electronics manufacturing services (EMS) providers who are looking for shortage…
It’s not just semiconductors that are in short supply
Lead times are stretching and prices are rising for passives, connectors and power supplies. It’s no secret that electronics purchasers are being challenged by allocations, shortages and long lead times for a variety of semiconductors including microcontrollers, diodes, graphics RAM chips and power semiconductors, among others. However, while chip shortages seem to be garnering most of the attention, supply is tight and lead times are stretching for many capacitors, resistors, and other passive components, connectors, electromechanical devices and power supplies. Prices are also increasing for many electronic components , ranging from the mid-single digits to 30 per cent. David Stein,…
It’s not just about inventory and timely delivery anymore
Buyers need distributors to provide more technical advice, market intelligence and cost-reducing value-added and supply chain services. In the not-so- distant past the expectations that many electronics purchasers had of distributors were that distributors had the parts buyers needed in stock and would be able deliver them in a timely fashion. But times have changed and buyers now expect much more from distributors. Some buyers regard their distributors as strategic partners and rely on them not just for parts and timely delivery, but also for cost-cutting value-added and supply chain services and for need-to-know market intelligence about the supply chain….
Distributors expect 5G will boost business for years
Fifth-generation wireless technology’s speed and low latency will enable new applications and increase component demand. Industrial, defense and aerospace and communications have always been important customer segments for electronics distributors, but technologies such as 5G, alternative energy, and artificial intelligence will likely have a significant impact on distribution over the next five years. Those technologies will result in many new products that will create sales opportunities for distributors. For instance, 5G is usually thought of as the next generation mobile phone technology. However, once 5G networks and infrastructure are built out, they will enable a plethora of new commercial industrial…
IoT, 5G and alternate energy will help drive the North American EMS market
EMS providers say while the pandemic slowed production of equipment last year, demand is recovering and single-digit growth for many contract manufacturers is possible. Electronic manufacturing services providers say they are optimistic that they will grow business over the next five years because of rising demand from companies making products for alternative and clean energy, industrial applications, 5G and Internet of Things (IoT) and an overall increase in outsourcing by OEMs in some industries. Many North American EMS providers struggled last year as some industries shut down production for a time because of the pandemic, but many contract manufacturers still…