Component shortage: Factors and Assistance
The electronics industry is undergoing another period of shortages which is expected to last until the end of 2018 at least. There are a lot of reasons for these periods of component shortages including a demand rise, obsolescence, company mergers, supply chain disruptions and the capacity of the production at the manufacturing sites.
This latest shortage issue has been, in part, attributed to greater demand and advances in the IoT sector along with the rise in demand from the automotive industry.
23 billion devices are predicted to be connected in 2018, a rise of 3 billion from 2017, and this is predicted to keep rising at a similar rate for the next few years. It is not just these new connected devices that are driving this, there is a whole array of other devices that are growing because of the support needed for the IoT increase – 5G connectivity, Security, Wireless technology and Data collection and storage are crucial to the advancement of IoT and these areas are also putting a huge demand on component supply. This “support network” for IoT is particularly increasing the demand for memory devices.
The growth of more connected cars and electric vehicles are also a factor in this latest component shortage issue. There are concerted efforts in place in the automotive industry to enhance the driving experience and increase safety features and some of these are being encouraged with tax incentives.
As a result, the automotive industry is spending more on electronics than ever before and this shows no signs of slowing down, in fact this will continue to rise at an even higher rate in the foreseeable future. In the 1970s the cost of electronics in a standard car was just 5% of overall cost, currently this is closer to 45% of the overall cost. It is expected that when the fully autonomous driving becomes a more readily available reality, that the quantity of ICs used will be close to 7,000 per vehicle.
The high standards, quality and the reliability of components used in automotive electronics is above the consumer and industrial market, it is more akin to the components used in the Mil-Aero industry. And as a result, these industries are seeing an increase in issues with sourcing the parts they require due to the increased demand from the automotive industry.
Automotive flash memory market revenues worldwide from 2013 to 2021 (in million U.S Dollars)
Retronix are in a unique position in the industry in that we deal with component suppliers/brokers, OEMs and CEMs. As a result of this we are seeing the effect of from all three sectors and can help our customers with our Component Reclaiming Service.
Combining our rework, re tinning, re balling, ICOS coplanarity testing, electrical testing and re packaging services we have a full suite of processes to enable us to safely recover, re align, re tin/ball and test your devices to give you piece of mind that the part is fully functioning when you receive it back for use in new production or the service and support of current products.
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