Electronic Component Shortage: 5G, IoT, and Automotive Industries

There is a huge electronic component shortage, and it can affect many industries as a result. There's an easy way to source and acquire hard-to-find components.

Share to:

Share on facebook
Share on twitter
Share on linkedin
Electronic Component Shortage

In 2020, more than 50% of electronics manufacturing companies reported component shortages and delays.

In an age where we constantly buy and rely on electronic devices, this component shortage is causing significant disruptions. Therefore, finding the right component distributor is critical for 5G, IoT, and automotive manufacturers. But how do you find the right component shortage solutions provider? Where should you turn?

In this article, we’ll be outlining why we’re currently facing a shortage and what can be done to source and secure these scarce components.

Reasons for Electronic Component Shortages

Over the last few years, companies managing component inventories have struggled with part shortages, price increases, and extended leadtimes. However, there are several factors contributing to these shortages, beyond  the COVID-19 pandemic and other economic shifts. 

Let’s take a look at some of the contributing factors:

COVID-19

It has been well documented and published that the COVID-19 pandemic has significantly impacted the electronic component manufacturers production capacity.

This impact isn’t just centralized within the virus epicenter in China, but is being realized throughout the world. Moreover, with ever changing regional restrictions leading to labor shortages, freight delays, and raw material constraints, the supply chain for components has become increasingly volatile. 

Technological Boom

In conjunction with other contributing factors, technological innovations are occurring quicker and more frequently with each passing year. For instance, trends such as the emergence of 5G and Internet of Things (IoT) not only require more components for the devices themselves, but also the ancillary products that interact with the new technology. This advanced tech leads to exponential demand growth for electronic components. 

Smartphones in particular are leading this current technology shift. As they become more advanced and  powerful in design, the number of electronic components contained within continue to rise and push demand beyond production capacity.

Automobile Innovations

Although we see more electric cars on the market and major manufacturers work on additional models each year, they are not the only vehicles increasing the consumption of components within the industry.  Traditional combustion engine vehicles are also contributing to this trend. Both electric and combustion engine vehicles continue to include advanced technology as more standard features, each piece of which uses significantly more components than their predecessors; autonomous driving, automatic braking assists, infotainment packages, cameras, sensor systems, climate controls, etc.  The automotive manufacturers and their downstream partners are consuming volumes of components that are outpacing current production capacity, leading to many temporary halts in vehicle production around the world.

Component Shortage Solutions

Don’t worry though, just because these issues exist doesn’t mean there aren’t reliable component shortage solutions that companies can pursue in 2021.

Avoid Double and Triple Ordering

It’s tempting to utilize internet tools to locate potentially available products, however many of these tools post redundant available inventory. Companies and individuals should refrain from falling for these false listings and instead rely on trusted supply chain partners such as Velocity Electronics.

Supply chain management is better executed with a partner who specializes in locating actual stock.

Find Strategic Partners as your Electronic Component Distributor

In times of component shortages, it’s critical to have a reliable independent distributor that specializes in locating products in volatile market conditions. We recommend a strategic approach that harnesses the strengths and expertise of a qualified global independent partner.

Maintain Positive Relationships With Distributors

Once you’ve partnered with a reliable independent distributor, it’s vital that you keep an open dialogue and partnership with them. Moreover, this communication should reduce issues navigating heavily allocated market conditions.

Leverage Component Shortage Solutions with Velocity Electronics

If you need a reliable component solution, Velocity Electronics is dedicated to providing you the right components regardless of the current market challenges.

Contact your local Velocity office or Sales Representative with any questions, concerns, or challenges you may be experiencing.

Table of Contents

Stay Connected
More Updates
EMS vs OEM blog
Component Updates
EMS vs OEM: How They Use Distributors Differently

Learn the difference between electronic manufacturing services and original equipment manufacturers and how they partner with distributors to understand which will provide the solutions you are looking for.