With summer in full swing, it is the perfect time to take a look at the lead times of electronic components. This year has, so far, been dominated by the quiet whispers that suggest there could be the widespread return of allocation within the next few months.
At the time of writing, those reports have proved to be false, though lead times have expanded during the first half of the year. From May onwards, there has been higher demand than expected from high-growth sectors, particularly industrial, automotive and automation.
We can also say with a fair amount of certainty that franchise distribution channels are struggling to keep up with demand from major OEMs.
Talking to the EPS News website, Michael Knight warned that this high level of market activity would continue, saying: “We are anticipating this summer things will get even tighter, particularly in resistor chips [and] inductors.”
Indeed, ECIA’s latest North American distribution report corroborates this statement, as to do comments from Vishay’s CEO, Dr. Gerald Paul who noted that “shortages of supply and long lead times….raise concerns.”
The market is also beginning to feel the consequences of the recent spate of high profile mergers and acquisition. With product lines being rationalised, both OEMs and franchised distributors have fewer options to secure necessary stock. After years of being able to play manufacturers off against each other, they now find themselves at a competitive disadvantage in what has become a seller’s market.
Additionally, the problems that have engulfed Toshiba this year has impacted the availability of components. Although confined to the ultra-competitive memory market, lead times have increased, and so too has pricing. To make matters worse, a number of Toshiba and Micron lines have been placed on allocation to help the manufacturers deal with demand.
As a result, we would advise all purchasing departments to expand their supply chains to avoid unfavourable price rises, shortages and the long wait to secure stock.
With lead times rising and demand remaining at historically high levels, the threat of widespread allocation cannot be discounted.
Atlantis Electronics has a specialist purchasing department that can lock down large quantities of electronic components – no matter where that stock is in the world.
Thanks to our procurement team and trusted network of suppliers, we can help OEMs avoid extended lead times, sudden price hikes and the threat of allocation.
Call us on +1 905 290 1563 and speak to one of our representatives today.
To view our latest lead time table, visit this link: Atlantis Lead Times (July)