The global semiconductor shortage continues to make waves in the supply chain with automotive-grade chips still constrained with nine months or longer lead times, according to a new report from SupplyFrame and Jabil.
The report was taken through regular exchanges with industry supply chain members. The report found that significant to sever constraints remain for complex semiconductors including automotive microcontrollers. The worst news is that this supply chain constraint will persist into the first half of 2023.
Contingent labor availability and cost issues as well as elevated logistics and raw material costs will continue to plague semiconductor operations. Further issues will be compounded by climate change, geopolitical upheaval and a labor shortage will continue to hinder supply chain normalization.
(Learn more about semiconductors on Globalspec.com)
“Global supply and demand imbalance persists in the electronics value chain, with specific end markets such as automotive still facing long lead times and constrained supply,” said Steve Flagg, CEO and founder of Supplyframe. “Availability and prices are improving for many component categories, but shortages and increasing prices remain. Recessionary fears and worldwide inflation have dampened consumer electronics demand, led to skyrocketing inventories of certain passive components, and are driving memory and other prices significantly downward. And yet, parts like microcontrollers and analog components remain troublesome to secure and highly priced.”
New normal
Given the supply chain is approaching its third year of ongoing issues with finding the right parts, Jabil and Supplyframe said that companies need to adapt to a new normal and lay a foundation for the commodity/category management market that will be as important now as transactional sourcing.
For the past few years, alternate means of sourcing chips has become as important as traditional sourcing. As a result of the chip shortage and issues in the supply chain, global distributors have seen sales skyrocket.
Simultaneously, e-commerce distributors are also finding huge success due to customers coming from every point of the globe to find semiconductors. These e-commerce distributors, such as Supplyframe, have seen not only an increase in new users, but an increase in repeat users. This leads many to believe that digitization has also become a critical aspect of the supply chain.
Beyond such arrangements as producing custom chips with partners for future supply assurance in the automotive space, manufacturers across industries must address the daily as well as the strategic challenges of component availability, lead times and pricing dynamics to build resilience into their supply chains,” added Frank McKay, senior vice president, chief supply chain and procurement officer at Jabil. “It’s clear that they require objective market-in analytics and analysis to augment their enterprise information and move from fragmented data culled from multiple, often inconsistent and stale data sources.”
