IABM: Component shortages paint bleak picture
February 22, 2022
IABM published the results of its second electronic components supply survey. The picture is bleak, with lead times lengthening and component prices rising significantly since IABM’s last survey in April 2021. Respondents also sounded the alarm on their financial positions if component supply problems persist for a further 12 months; there are very few signs that the situation will improve in the short-to-medium term.
Some 97 per cent of technology vendors reported being significantly affected by component shortages – 63 per cent saying they are severely affected (up from 40 per cent in the April 2021 survey), 34 per cent moderately affected and just 3 per cent mildly affected (15 per cent April 2021).
The survey finds that lead times for components have increased by an average of 74 per cent and component costs by 44 per cent, resulting in a 26 per cent impact on final product costs.
Perhaps most worryingly, 86 per cent of respondents reported facing moderate or severe impact on their financial sustainability if the issues persist for another 12 months.
The survey also asked how companies were mitigating the effects of the shortages on their operations. 65 per cent are stockpiling components and 63 per cent are redesigning products.
“The findings of our first survey on supply chain problems with electronic components last April painted a worrying picture for our industry,” said Peter White, CEO, IABM. “The results of this follow-up survey demonstrate that the position has deteriorated further in the intervening months, and will result in significant financial impact if the problems continue for the next 12 months.
“With no early prospect of the component shortage problem being resolved, many MediaTech companies have responded by redesigning their products to mitigate issues with sourcing specific components, and/or stockpiling components where possible to keep their production lines flowing in the face of dramatically increased lead times. There is also evidence of component price increases which will either need to be absorbed by MediaTech suppliers or will feed through into increased end-product prices.
“I would like to bring the BaM Stock Exchange to the industry’s attention. We launched this last year to enable IABM member companies around the world to list their excess stock using internationally accepted parts codes and descriptions. IABM member companies who are experiencing shortages can search the BaM Stock Exchange listings to quickly discover if parts they require are available. It is a value-added service designed to keep short supply components within the industry to the benefit of all. I have been surprised that not many companies have taken advantage of the BaM Stock Exchange so far; perhaps this is the moment for them to do so,” White concluded.