Severe Electronic Component Shortages Forecasted for 2018

It’s been several years since the last major component shortage
and now electronic manufacturers are feeling the pinch. Demand is outweighing supplies and in some cases, customers have reported lead times of 24 months or longer. As distributors and component manufacturers issue Product Change (PCNs), End-of-Life (EOL) and Life Time Buy (LTB) announcements, buyer and engineers are scrambling to meet quarterly goals and production demands. With hundreds of thousands of electronic components, semiconductors and finished good products going obsolete every year, the 2018 component shortage is adding to the challenges facing the electronic part supply chain.

Another situation causing pressure on the supply chain is the fact that silicon wafer foundries have announced a planned 20% price increase for 2018 and possible shortages out to 2021. This is compounding the sourcing problem for electronic buyers.

Manufacturers GlobalWafers and SUMCO, who produce the majority of the worlds silicon wafers used to make electronic components including CPU’s and DRAM inside computers, site a shortage of 12-inch, 300mm wafers for the price increases.

A number of factors are causing the 2018 electronic component chip shortage including new industries such as the Internet of Things (IoT) and cryptocurrency mining  which is causing the shortage of graphics processing units (GPUs) and spotty availability of raw materials.

It is always recommended that electronic product design and engineering teams review bill of material (BOM) parts so they can be purchased from multiple manufacturers to avoid an interruption in the supply chain.

Dana Jiron
Inland Empire Components, Inc.
www.iecsolutions.com