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Widespread Component Shortages Expected Through 2H 2017

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The first half of 2017 is shaping up as the perfect storm for electronics suppliers as capacity constraints, merger and acquisition, obsolescence and higher-than-expected demand is creating component shortages across the supply chain. The risk of double booking has been cited in at least two research reports, indicating the 2001 inventory glut may be fading from the supply chain’s memory.

t’s an environment that the world’s largest electronics distributor, Arrow Electronics Inc., hasn’t seen in a decade. “Entering the second quarter, the percentage of customers saying they did not have enough inventory was at the highest level since 2010,” Arrow CEO Mike Long told analysts during a conference call. “The percentage of customers saying they had too much inventory was at the lowest level in over 10 years. We've taken all appropriate steps, including taking on inventory, to assure our customers get the parts they need.”

Leadtimes for some products are stretching to late in the third quarter (Q3) and into Q4, according to research and industry sources. AVX, Murata, Kemet, Fairchild/ON Semi and Diodes Inc. are all quoting lead times/deliveries out into late Q3 or Q4 on some lines. “At Avnet, we are seeing lead times stretch across the board,” said Phil Gallagher, president of Avnet Inc.’s Core Distribution Business. “Using semiconductors as an overall market proxy, we are seeing extended lead times across the following product types: analog, in interface, op amps, V-regs; discretes, in power, IGBT, mosfets, TVS (circuit protection), zeners, thyristors, bipolar; memory, across the board for DRAM, NOR, NAND, EEPROM, EPROM; logic, in standard logic; opto, in high, mid and low power LEDs; MCU/DSP, in 8, 16 and 32 bit MCUs both ARM and proprietary architectures.”



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