Sign In  |  Register  |  About Menlo Park  |  Contact Us

Menlo Park, CA
September 01, 2020 1:28pm
7-Day Forecast | Traffic
  • Search Hotels in Menlo Park

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Avnet Insights: Chip Shortage Underscores Opportunity to Strengthen Strategic Relationships

Following several years of supply chain disruption and uncertainty, engineers are strengthening their reliance on strategic relationships with partners, such as distributors, as they seek to mitigate the complexities of the global components market. The second annual Avnet (Nasdaq: AVT) Insights survey, which keeps a pulse on trends and market forces amid the electronics and components industry, found that engineers and product designers are seeking opportunities to capitalize on the power of partnership to get products to market.

Key takeaways from 2022:

  • Following more than two years of systemic disruption, respondents have a cautious outlook on the semiconductor market. Looking back at the last year, over half say the components shortage has become more severe since 2021 (59%).
  • The concern lies more with the ongoing shortages than overall market conditions. Over three-quarters (79%) of respondents said component availability is of most concern to them, compared to 18% who noted market conditions.
  • Still, the ongoing challenges have underscored the importance of strategic design and supply chain services – and engineers and product designers are taking notice. Nearly a quarter (23%) have begun testing and qualifying multiple parts that meet requirements early in the design process to design-in flexibility. Additionally, organizations are adjusting their supply chain strategies to build up buffer inventory (23%) and lengthen supply agreements (21%).
  • Looking ahead, most are preparing for continuously increasing prices (29%) and even longer lead times (26%).
  • Regionally, however, there are signs of optimism. Of respondents in Asia, more than a third rate their perspective on the market as fair, good, or excellent (36%).

Amid an uneven market, pricing, lead times, and stock are top of mind.

Three-fourths (74%) of respondents said access to electronic components has been a very significant challenge, a consistent theme year-over-year, and subsequent frustrations are mounting. Most are pointing their frustrations to those higher prices and delayed production schedules, with over 8 in 10 saying they have gotten worse. Further, most are preparing for prices to continue increasing (29%) and lead times to continue to lengthen (26%).

The components most impacted by the shortage have been logic and programmables, and MCUs. When asked how access has changed, nearly three-quarters said it has worsened for both sets (74% each), more than other categories.

“Our second annual Avnet Insights survey shows that as engineers are trying to definitively pull out of the last several years of disruption, recovery will not be linear, and will instead be highly dependent on the industry one is designing for,” said Peggy Carrieres, Vice President of Sales Enablement and Supplier Development, Avnet. “However, the findings also underscore how these engineers are relying on industry partnerships to chart creative paths forward.”

Engineers seek guidance on design flexibility and supply chain planning.

To address the market, many respondents are now focused on adding flexibility to their components from the start, creating an opening for distributor design services. While some are opting to wait (23% of respondents in EMEA said they are willing to delay product introductions to overcome shortage concerns), the most popular tactics for engineers to work around the current environment are design-based. These include using pin-to-pin replacements (25%), redesigning boards (25%), and using drop-in replacements (25%). In terms of the actual design process, 25% are designing in approved components with multiple manufacturers while 23% are testing and qualifying parts early in the design process.

Other design strategies engineers are turning to include seeking alternative sources for parts (35%) and going beyond the currently-approved manufacturing list for their organization (23%). Still, engineers remain aware of component risk: 13% are prepared for companies to increase due diligence in this respect.

Supply chain visibility, transparency, and agility have been key considerations for organizations throughout the recent disruptions. Avnet Insights found many are turning their attention to building up buffer inventories (23%), while others are looking to enter long-term supply agreements (21%) and improve relationships with their distributors (19%).

“Relationships between engineers and distributors are continuously evolving and cyclical, and right now, we are seeing an increased understanding of the value that distribution, and its associated services, can add in the midst of prolonged uncertainty,” added Carrieres. “Engineers and product designers who lean into distribution’s design and supply chain services will not only be prepared to succeed in the current environment, but also be well positioned to navigate any potential future disruptions the industry – and technology – may face.”

The Avnet Insights customer survey was conducted among n=1605 global engineers. Regionally, respondents were based in the Americas, EMEA, Asia, and Japan. The survey was fielded online from September 6-23, 2022 using Avnet’s global customer database.

About Avnet

As a leading global technology distributor and solutions provider, Avnet has served customers’ evolving needs for an entire century. We support customers at each stage of a product’s lifecycle, from idea to design and from prototype to production. Our unique position at the center of the technology value chain enables us to accelerate the design and supply stages of product development so customers can realize revenue faster. Decade after decade, Avnet helps its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at avnet.com.

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 MenloPark.com & California Media Partners, LLC. All rights reserved.