Electronic components, particularly capacitors and resistors, are becoming increasingly hard to come by, and demand only continues to rise in response to shrinking distribution channels.
In recent years, component manufacturers have been investing heavily in the fabrication of next-generation electronics rather than in devices that have been around for decades. But it is these legacy, low-cost devices that are now in highest demand and lowest supply, and suppliers are noting a spike in double ordering as customers scramble for parts in an effort to meet production schedules.
Customers can continue to expect extended lead times.
Investment firms Morgan Stanley and Stifel found that ongoing electronic component shortages won’t let up anytime soon.
“Lead times remain elevated across a number of components, including capacitors, resistors, memory and certain discretes, according to our analysis of distribution data,” Stifel reported recently. “We continue to see signs of double ordering as customers scramble for parts. The multi-layer ceramic capacitor (MLCC) shortage is the most severe, with many parts seeing order-rescheduling requests from customers waiting on MLCCs or other parts,”
Stifel’s poll also found that 49 percent of capacitors, 35 percent of resistors, and 9 percent of discretes fell into the “highly constrained” category. Forty-one percent of discrete suppliers are quoting lead-times of 15 to 18 weeks and 14 percent are quoting 26-week lead times or longer.
Industry insiders predict that as capacity begins to take hold in early 2019 that over-demand will decrease, though not enough to ease tension in distribution channels. Furthermore, no one is sure about when industry-wide capacity will actually resume due to testing and qualification times. Many factors will affect the extent of the shortage and how quickly additional capacity will be online, including growth demands and cost considerations.
Tariffs will also contribute to the challenges of achieving additional capacity. The Electronic Components Industry Association reports, “In today’s digital world, nearly every industry utilizes electronic components and the supply chain for such components is globally interconnected and complex. As a result, the imposition of tariffs on electronic components will have global consequences for businesses and consumers alike, adding friction and costs to the supply chain that can hinder economic growth for all involved.”
Buyer beware
Delayed production schedules are not the only concerns customers need to worry about. Though component shortages are liabilities for customers, they offer advantages to counterfeiters who seize the opportunity to inundate the market with fake, damaged, or re-labeled parts. Though independent and hybrid distributors have stepped up their anti-counterfeiting efforts, they often lack the capacity to reliably trace parts back to their origins, making it hard to guarantee quality.
Solutions are available
At Pivot, we’re the single-source leader for helping you find the quality-verified parts and replacements that can keep your company’s production on schedule. Not only can we help you overcome the current components shortage with our global supply chain and in-house engineering resources, but we can also help you grow your business with product design, development, and manufacturing solutions. Contact Pivot today and we’ll successfully see you through the shortage!
