The semiconductor shortage continues to stall global industries and increase the risk of counterfeit components. The far-reaching effects of the pandemic and the war in Ukraine are ongoing factors in the semiconductor industry’s temporary inability to catch up with demand. As manufacturing costs and lead times are increasing, semiconductor prices are dropping. Is this a time to panic, or will things even out? Let’s take a closer look.
Record Wire Fraud Reports
Reports of wire fraud related to the semiconductor shortage are on the rise. According to ERAI Inc, there were 101 semiconductor-related wire fraud cases in reported 2021, up from 70 in 2020 — and the problem could get worse as companies scramble to find enough components to meet consumer demand.
Most of the wire fraud is based in China, where desperate buyers are turning to shady suppliers who take the money and run.
Significant Decline in Automotive Industry
The global auto industry is taking a big hit due to the semiconductor shortage. Ford is optimistic relief will come toward the end of the year. But, Intel and China’s Guangzhou Automobile Group predict the shortage will carry on through 2023 or even 2024.
General Motors, Honda, and Toyota reported notable second-quarter sales declines of 15%-50% despite high consumer demand for new vehicles. There simply aren’t enough to go around.
Honda and Volkswagen have decided to omit features that require semiconductors, like advanced parking sensors or blind-spot monitors. Therefore, they can continue to ship new vehicles. Meanwhile, GM plans to hold off on making deliveries to dealers until all missing components can be installed in their vehicles.
PC Shipments and Semiconductor Prices Drop
Gartner, Inc predicts that worldwide PC shipments will decline 9.5% by the end of 2022. That’s more than any other device segment this year. At the same time, memory chip prices are falling fast. That could indicate that demand is down and the semiconductor shortage may be close to ending. However, that contradicts forecasts from other industries. So it’s safe to assume the situation will remain fluid as the year progresses.
As the semiconductor shortage continues, prices are likely to shift, counterfeit components may become more common, and wire fraud reports could increase. It’s important to deal only with vetted, reliable electronic parts suppliers—that’s why Velocity continues to enforce the industry’s most robust counterfeit avoidance and detection protocols and provide our customers with unmatched supply chain security.
When the semiconductor market is unpredictable, Velocity guarantees quality and integrity every step of the way.