Electronic components shortage explained

Electronic components shortage explained

Electronic components shortage explained

Since the pandemic outbreak, there’s an ongoing global shortage of electronic components, which you surely noticed or heard about, and can be explained by a variety of reasons. Semiconductor manufacturing is a complex and delicate process, in which even a small glitch can cause the entire production chain to halt. Imagine a product composed of tens or even hundreds of components: if just one is missing, the product cannot be shipped. PCBs are often designed with tight and precise constraints, and components cannot be easily substituted without redesigning the whole board.

Quarantines and lockdowns for sure played an important role in the supply chain crisis, introducing delays in shipping schedules. Moreover, remote working increased the number of people needing electronic devices to communicate on the internet, thus increasing demand. In addition, especially during the first months of the pandemic, consumers saved globally more money, further boosting demand. Semiconductor manufacturers could not ramp up the production, as they already worked almost at maximum capacity, and building a new factory is a long and expensive process.

Many naval transportation companies underestimated the post-pandemic rebound of shipments, which played an important part in the entire supply chain crisis. It slowed down and increased the cost of shipments, and consequently the cost of raw materials. Nowadays this effect is starting to fade, as things are getting back to normal. Most of the people have now pre-pandemic behaviours, and companies are adapting to this new normality.

The current situation

Regarding electronic components, prices have increased a lot in 2021 and 2022, as explained before, and the shortage made stock management harder. In 2023 we aim to further increase our position for Industry 4.0, as the shortage is hopefully approaching its end. Components are in some cases reaching pre-pandemic prices and are progressively easier to find.