Article by: Supplyframe
New analysis from Supplyframe suggests that raw material shortages and cost increases will persist in the first half of 2023.
New data from Supplyframe paints a grim picture of current and projected conditions in the electronics supply chain, where tight raw material supplies and cost inflation are impacting most inputs in all categories. Ongoing category challenges at the start of this quarter suggest there will only be pockets of relief through the end of 2022 and into 2023 for many commodities.
This includes resin and additive raw material shortages, rising fuel and metal costs, and challenges with affordability and availability of labor and freight capacity. .
“Geopolitical uncertainty and the far-reaching impacts of Russia’s invasion of Ukraine, persistent global inflation and recurring COVID-19 outbreaks continue to wreak havoc and test supply chains across the country. industry under siege,” said Supplyframe CEO and Founder Steve Flagg.
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There is no relief in sight for the second trimester
The second quarter began with a deterioration of almost half in all dimensions of Supplyframe Commodity IQ. And the number of price indicators in the red rose 16% quarter-on-quarter.
Things are not expected to improve in the quarter. Commodity IQ expects 85% of all pricing dimensions to increase and 83% of all delivery time dimensions to extend this quarter.
“Sustained outbreaks of COVID-19 in two-thirds of China’s provinces and elsewhere in Asia are driving government-mandated shutdowns and strict lockdown protocols – creating new workforce limitations, straining the supply and introducing further supply chain disruptions,” said Richard Barnett, Chief Marketing Officer. and Head of SaaS Sales at Supplyframe.
Supply chain challenges will continue through 2023
The electronics supply chain can expect increasing challenges next year. During the first quarter of 2023, more than 70% of delivery times are expected to increase. During this period, prices for complex analog semiconductors (ASICs, MCUs, MPUs, PLDs), flash memory, non-ceramic capacitors, resistors and standard logic devices are expected to increase, with some exceptions. Most of the same devices will also stay at or exceed already high timeframes.
One category that remains particularly stubborn and hostile is the active component market. From analog power and standard logic to ASICs and sensors, this space will be swimming in a sea of red flags over the next four quarters. This is happening as high demand continues, production is at full capacity, delivery times are extended and rising prices are plaguing most devices.
Passive components are not as constrained as active components. However, like active components, passive raw materials also suffer from raw material issues and labor shortages.
But new forms of intelligence can help manage risk
Commodity IQ, powered by Supplyframe’s Design-to-Source Intelligence (DSI) solutions, uses a unique combination of insights and analytics to deliver actionable insights to electronics industry practitioners. It is backed by raw material sourcing experts from more than 350 Supplyframe DSI network partners who manage more than $140 billion in direct materials spend and the powerful analytics generated by more than 10 million supply chain professionals. supply and electronics engineers. And, to help companies improve end-to-end risk mitigation and opportunity identification across their supply chain during these troubling and complex times, Supplyframe announced new aspects of Commodity IQ intelligence this quarter. .
Supplyframe has partnered with MetalMiner, whose MetalMiner Insights platform provides unique insights into metal market prices. Commodity IQ now includes MetalMiner monthly prices, forward analysis and price predictions for essential and precious metals.
Additionally, Supplyframe introduces bulk and volume lead times for electronic components analyzed in Commodity IQ. Based on large-scale quotes of thousands of Manufacturer Part Numbers (MPNs) on millions of data points, these lead time trends express percentages of MPNs within each range of factory lead time quotes and will be updated every quarters. In another enhancement to its offering, Supplyframe now presents design and demand metrics in Commodity IQ on a monthly basis with three-month forecasts.
“The electronics supply chain continues to face unprecedented new challenges,” said Flagg. “But leveraging new forms of intelligence can help these companies better understand and manage risk, build resilience into their new product designs, and expand their opportunities.”