Electronic Component Shortage Recovery & Industry Outlook for 2019

Electronic Component Shortage Recovery & Industry Outlook for 2019

Updated: Mar 12, 2019

2018 was an amazing year for some, but an extremely difficult year for many when the widespread electronic component shortage took place. No matter which side of the fence you were on, recovery in 2019 is proven to face many challenges as a result of the previous year’s immense shortage market.

Obsolete and End-of-Life (EOL) Products

Innovation is occurring faster than we can adapt to it, and the added strain of electronics obsolescence can create an enormous headache for most buyers. While obsolete products are already difficult to source, the shortage market proves to be an added strain for these manufacturers of long-lifecycle products; such as military, aerospace and medical manufacturers. However, as component manufacturers seek innovative designs with shorter life cycles more frequently, the obsolescence issue begins to impact virtually all segments of the electronics industry. Changes in government regulations and the economy will cause a spike in EOL notices, along with frequent mergers and acquisitions.

Advanced MP Technology has assisted customers facing obsolescence issues with customized programs for over 40 years. Utilizing our highly trained staff and verified resources, Advanced MP Technology can quickly check BOMs and individual requirements to determine the status of product lifecycles, arrange LTBs and suggest alternatives or replacements for obsolete parts. Encompassing a proactive and comprehensive component obsolescence process is the key to managing product lifecycle requirements and EOL concerns.

Lead Time Issues

Multi-layer ceramic capacitors (MLCC’s) are still a problematic component in the marketplace with shortages being the norm for over a year. It is uncertain whether any improvements will be seen for MLCC’s until 2020 and some manufacturers have even increased MLCC pricing by up to 40% in comparison to 6 months ago.

Additionally, Infineon has issued an EOL notice for small signal products with an LTB of December 31, 2019. Both Xilinx and Rohm are also showing extended lead times, which makes it extremely important to share long term forecast information with supply chain partners to maintain continuity of supply.

The Impact of Tariffs

2018 was the year the U.S. imposed additional tariffs on various electronic components for items manufactured in China. The results of the U.S. tariffs on the electronics industry continues to remain uncertain. However, there are some areas to keep watch over when it comes to tariff impact on the electronics market.

The pressure to save costs and meet demand is now stronger than ever, which introduces a higher risk of counterfeit parts entering the supply chain. Advanced MP Technology conducts an extensive three-stage quality inspection procedure to ensure only the highest quality components are shipped to our customers for counterfeit avoidance.

Whether you are facing issues with obsolescence management, lead times, or other market fluctuations, Advanced MP Technology provides our 40 years of excellent customer service to ensure our customers receive the highest quality components on time, every time.