For most of the people, 2020 is finally coming to an end, a promising 2021 is around the corner. What are the current status of the electronic manufacturing supply chains? Manufacturing facilities without adequate space to ensure correct social distancing practices, still, are not running at full capacity and output, how long will it be before the electronic component market stabilizes
- ST Microelectronics are continuing to struggle to meet heavy demand of their STM32 microcontrollers, with lead-times continuing to extend and stock becoming harder to secure. Any demand for STM32’s should be secured within the supply chain for the remainder of 2020, Q1 2021 and into Q2.
- Lead-time increases and shipping delays are expected from most manufacturers with a combination of scenarios fuelling this. Manufacturing facilities are operating under capacity due to COVID-19 secure ways of working, freight is taking longer to move due to less readily available commercial flights, 5G demand is rapidly exhausting stock from the marketplace and OEM’s are nervous of over commitment on stock with markets still unstable and future demand unknown.
- Linear Technology lead-times are still fluctuating, but now look to be more than 20 weeks across most ranges. This is due to raw materials being consumed in medical applications.
- TE Connectivity are struggling still with allocation on relays (52 weeks), this has been ongoing for at least 12 months, and is showing no signs of improvement yet.
- There are reports that Vishay IHLP inductors are on 70 weeks plus, forward visibility of demand is crucial, this has not improved throughout Q3 and forward ordering is critical.
- Altera lead-times have slowly increased, and are now around 16 weeks, this is due to higher demand in the server market.
- Texas Instruments are preparing to use Arrow Electronics as their sole global distribution partner; the formal end of the current franchise agreements with other distributors will be 30th December 2020. Macnica and TED will be supporting Japan, and Digikey and Mouser will continue to support high service needs for immediate low volume purchases.
- NVIDIA are looking to buy Cambridge based ARM for a reported $40 billion to expand on ARM’s R&D with cutting edge NVIDIA AI technology.
- The Maxim and ADI merger is likely to take up to 18 months to see an impact on the supply chain, but it should be noted now that many ranges will be likely consideration for obsolescence to avoid duplication between the two technologies.
- Global airfreight is down 12.6% from last year, with surcharges having been in place for most of this year. Rail and Sea options are becoming more popular to keep cargo moving. With peak season once again on the horizon, further disruption is expected with an increase or return of surcharges likely to be implemented from Q4.
- Chinese New Year falls on 12th February 2021, with most factories on a two-week shut down for the 15 days of celebrations for the year of the Ox that will be held. As the holiday is early in the calendar year, any PCB’s should be ordered well in advance of this, as early as possible in Q4 to ensure on time delivery from factories in Asia. Peak Season surcharges are still in place, but there is hope these can be removed from August 2021. Many manufacturers and distributors are heavily reliant upon using commercial airliners to transport goods; without these, cargo and freight space is at a premium with logistics companies
- Pricing is still volatile, with planned manufacturer increases observed, as well as increases due to constrained supply of product, capacity, and raw materials.
- COVID-19 is still fuelling this instability and it is hard to tell how long this will go on for. Manufacturer price increases should continue to be expected, especially as they attempt to re-coup any lost sales throughout the pandemic, but the effects could go on for many months after it is contained.
- ST announced to increase prices across all product lines effective from 1st of January 2021.
- Xilinx announced to increase 25% for their old parts from 5th of April 2021.
- IC design companies, such as Novatek and FocalTech, increased 10%-15%.
- NXP announced to increase prices across all product lines.
- KB, one of the largest CCL manufacture, announced the 5th round of price raise in 2020.
- Renesas announced to increase prices for some of their product lines including Analog IC and Power IC from 2021.
Related article about PCB costs increasing in 2020: http://henengpcb.com/year-end-review-on-the-pcb-materials-development/