Component lead times rising
Are rising component lead times starting to affect your business? Long lead times was an issue long before the global Covid pandemic — it has merely intensified the situation.
At the start of the Covid-19 pandemic, lead times and shipping times naturally increased. It appears to us as though the situation will last throughout the year, although some voices believe that it will improve somewhat in the fourth quarter.
Long term planning your near future projects is key as long lead times can affect your revenue. There are several good reasons to why you should plan early:
- Lead times of up to 52 weeks for some semiconductors.
- Freight lead times and freight prices are increasing
- The global demand for components is currently larger than the supply
- Supply chains are stockpiling
- Risk purchasing refurbished, poor quality or counterfeit components
- New technology grows faster than manufacturers can produce
Lead times of up to 52 weeks for some semiconductors
For some semiconductors there are lead times of up to 52 weeks. Fire destroying a major semiconductor plant in Japan, in October last year, did nothing to diffuse the shortage situation.
Freight lead times and freight prices are increasing
Freight lead times by boat are currently 7-8 weeks from Taiwan, however freight prices have near doubled, as has cargo flight prices as there are fewer flights available.
The global demand for components is currently larger than the supply
It’s the same situation in all markets and affects the production of home office electronics, other consumer electronics, 5G telecom equipment, automotive industry, etc., it also effects embedded products and systems.
Supply chains are stockpiling
Leading component manufacturers such as AMD, Qualcomm, Xilinx, Intel, Broadcom, and others report that the situation is intensified by the fact that several supplier chains engage in stockpiling. It is not just from our own off-the-shelf product partners we are hearing this but from global, regional, local distributors and EMS’. They all tell us to plan longer ahead.
How to act?
The answer is as simple as it is difficult, long-term planning and early involvement.
How we can help?
If you are sourcing hard to get components or are in the market for second source systems, we can help. We have a network of alternative suppliers that we have long relationship with, helping you avoid purchasing refurbished, poor quality or counterfeit components. In some cases, we can even source components directly from our partners’ warehouse.
We are flexible in terms of coming up with solutions that can aid the current situation, e.g. through increased local warehousing and long lead item sourcing of critical components.