The Electronic Component Shortage

At the start of the year, Retronix had reported on the critical semiconductor shortage threatening to hamstring production lines of the world’s largest carmakers – demand is high, supply is tight.

Fast forward to today and that looming threat has become a stark reality with the world’s biggest carmaker Toyota, having just announced that it is to slash worldwide vehicle production by 40% in September. Volkswagen, the second-biggest car producer, has warned that it may also have to slash production (BBC News).

What has caused this disruption?

As reported by the Harvard Business Review there has been a multitude of one-off factors that have caused this situation that likes of Samsung, VW and Apple find themselves in today. From fires in Japan, storms in Texas to more unnatural Geopolitical factors, these unrelated occurrences have created a domino effect of disruptions that have caused a severe in-balance in the semiconductor supply chain.

However, as highlighted by Business Line, “supply chains in all sorts of industries have dealt with shortages resulting from catastrophes before” and have managed to pull through. So, what’s different this time?

The Electronics Supply Chain

The truth is that this imbalance in the supply chain was present far before any of these “freak” occurrences. Direct Components explain that the shortage of multi-layer ceramic capacitors (MLCCs) is a consequence of the rise in demand for portable technology and automotive advancements. In turn, this has exasperated the availability of tantalum capacitors, a well-known MLCC alternative. Harvard Business Review calls for large manufacturers in automotive and other sectors suffering from this component shortage to take a long hard look at their supply chain strategies and ask themselves “Where have they prioritized cost reduction at the expense of risk management?”.

Certainly, if we have learned anything from the pandemic, supply chains are extremely volatile, and while the vaccine is picking up pace in the fight against COVID-19. The shortage in components doesn’t seem to be going away any time soon.

How can Retronix help?

From Retronix perspective, we have seen customers reporting that they are having to step outside of the approved suppliers to source the components they require. This has seen an upturn in our testing services as we act as a third-party test house to help our customers verify their new suppliers. Our Component Reclaim Service also offers a much-needed solution for customers by safely and quickly recovering and reworking components for builds.

Click HERE to learn more about our Semiconductor Shortage Solutions Service or get in touch today via the contact form below.

Component Shortage Infographic

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