Variosystems Supply Chain Forecast

As global EMS partner, we are continually analyzing market developments to be able to react as soon as possible to disruptions when they occur. From what we have seen, experienced and analyzed over the past few weeks, the electronic component market is heading towards a very challenging 2021. We can already see a drastic change in conditions on the procurement market resulting in major increases of lead times:

China’s expansion course

Asian manufacturers are still on a growth path in terms of vehicle electrification (e mobility), 5G network equipment, consumer products, etc. This results in a very strong demand for electronics, which affects semiconductors as well as passive components. As a result, Chinese PCB manufacturers are currently experiencing record bookings, which consequently leads to extended delivery times.

COVID-19

While we are currently pleased to report practically full production capacity at all of our manufacturing sites, this is not the case for all component manufacturers. Many have suffered from significant closures over the past few months and although they may be back in production, they cannot keep-up with the demand. This also creates increased lead times.

Low inventories

As most OEMs have been conservatively placing orders over the past few months due to the market uncertainty, finished product inventory is at its lowest. The same effect is also true for many of the passive and active components. With the upcoming market upswing, driven by strongly growing business segments, new challenges arise with drastically increased component delivery times in the short term all the way up to resource allocation.

As an example, we have seen many passive lines increasing their lead times to 18-30 weeks, logic 14-26 weeks, power management 20-30 weeks, bare boards 6-10 weeks, etc. We are in intensive discussions with the management of our distributors and are aware of component shortages in the coming months.

With this being said, you should reevaluate the current situation to extend the standard planning window and get components on order sooner. Just get in touch with us to plan together how we can best help you avoid product shortages in 2021.

Your Variosystems Team!

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