Bolaji Ojo at EPSNews: Is the electronics supply chain diving headlong into one of its infamous component undersupply situations and the associated procurement woes? Some industry veterans are concerned this may be the case as they watch average selling prices inch higher and demand strengthen in an environment marked by low inventories and limited manufacturing capacity.
With companies keeping a wary eye on uncertainties in the global economic and political environment – and hesitant to raise capex – the stage may be set for a scary demand-supply imbalance by the third quarter of the year, sources said.
It may be too early to categorically state that the electronics industry will be by mid-year enmeshed in another round of its vicious shortage cycles. The industry is notorious for projecting inaccurate sales forecasts, numbers which companies nevertheless use to determine capex and other major infrastructure expenses. The repeated failures to hit projected sales figures have in the past hurt suppliers and OEMs alike, forcing many of them to be more cautious in production capacity planning.
What could be different this time is that the wariness has spread so thoroughly into the supply chain that limited capacity exists today to absorb any unanticipated surge in demand. Current forecasts, for example, calls for semiconductor sales to rise anywhere from the low single digit to as high as 15 percent in 2017. The numbers vary widely. The World Semiconductor Trade Statistics said IC sales will rise about 3 percent this year, after a no-growth situation in 2016, and climb 2 percent in 2018. Meanwhile, Gartner Inc. in November revised upward its earlier forecast and now expects semiconductor sales in 2017 to jump 7.2 percent from a mere increase of 1.5 percent in 2016.
Read more: EPSNews
Courtesy of Bolaji Ojo