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…
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…