White Horse Laboratories

Component shortages are not new, yet the challenges facing the industry today are unprecedented. The COVID 19 pandemic has contributed to, but not the only cause of, critical shortages in the semiconductor supply chain. In the automotive industry, entire production lines have already had to shut down or switch to short weeks, and feverish efforts are underway worldwide to protect the security of the most system-critical supply chains. Published lead-times of 52 weeks+ are common.

And the vicious cycle continues to heat up. With cutting-edge technologies such as electronic vehicles, industrial automation, 5G, Industry 4.0 and IoT, demand for electronics and their components continues to rise. 

Production capacities are reaching critical heights. Even as the semiconductor and printed circuit board industries upgrade existing production lines and invest in accelerating the creation of new facilities, it will take time for production congestion to ease. Leading semiconductor manufacturers  don’t expect this crisis to end soon. 

In addition, not all components or materials that have been in circulation can be reused for any application, such as in the aerospace or military industries. Companies factor storage and environmental controls in the cost of quality control itself. But more and more often, this calculation does not add up.

The current shortages highlight the volatility of supply chains, which have become more susceptible to disruption as they grew more complex complex. Not every manufacturer has the ability to use nearby suppliers to prevent costly delays in production lines. The deep roots that the global electronics industry has put down in China  cannot be summarily cut, nor does it need to be.