The global shortage of components has been affecting the electronics industry, including contract manufacturers such as MPE Electronics, since the advent of the Covid-19 pandemic and, over the last year, its impact has intensified.
While the restrictions imposed by the pandemic and their effect on manufacturing, notably in China, are the primary cause of the global components shortage, a number of other factors are compounding the problem. These include the ongoing trade war between the USA and China and strong demand for electronic microchips, not least from a booming electric car industry.
In addition, the severe drought in Taiwan, another major producer of electronic microchips, continues to contribute to the component shortage, with manufacturers still recovering from the restrictions put in place in 2021. The impact of the blockage of the Suez Canal is also still being felt.
Challenging conditions but light at the end of the tunnel
Both at the start of 2022 and as we get further into the year, it has become harder and harder to source electronic components and there have also been quality issues with some of the components that have been available.
An increasing amount of components are not being sealed or packaged properly, allowing moisture to affect them. There are a number of reasons for this, including the splitting of batches of components in the face of high demand, which is when damage occurs. Baking components is then required to remedy the situation, to make sure that the chips are of the requisite quality, all of which takes time and money.
However, the news isn’t all bad. As the end of Q1 draws closer, there are early signs that the disruption to the electronic component supply chain is easing. That said, supply issues remain and the sourcing of components is expected to continue to be challenging throughout 2022, with ongoing implications for pricing and lead times. At present, the situation isn’t expected to return to normal until 2023 at the earliest.
How MPE is managing continuing supply chain disruption
In common with our industry peers, MPE Electronics has been unavoidably affected by the global component shortage. But our planning and strong supply chain framework is ensuring that our customers are experiencing minimal disruption.
As the scale of the component shortage began to become clear in the spring of 2020, we moved to strengthen our supply chain framework, cementing long-standing relationships, expanding our supplier base and increasing our stock levels. These steps are benefiting us and our customers in 2022, bringing welcome stability and security to our operations.
Furthermore, our robust planning and supply chain agility is allowing us to minimise the impact of the rising prices of electronic components and other essential raw materials on our customers. The supply chain crisis has led to a dramatic increase in costs and we are working hard to take on as much as we can.
Our commitment to stable product service in 2022
The global supply chain shortage is set to continue to impact the electronics industry throughout 2022, but we are pleased to report that we are managing the situation well. We are confident that we can continue to honour our commitment to product quality, fair pricing and a high level of customer service throughout the shortage.