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Market update
Techpoint ’ s expert report into electronics supply this month
Over three years since the UK first went into lockdown , we have seen marked improvement for lead times . Yet , the effects of the pandemic are still being felt alongside wider geopolitical tensions , resulting in uncertainty and potential instability . So , while we have seen improvements across supply chains this trend is not guaranteed to continue . This uncertainty has resulted in customers increasingly being met with Non-Cancellable Non-Returnable ( NCNR ) terms for their orders .
Procurement specialists at Techpoint maintain that the best course of action is to plan for the medium and long term . This means that ensuring clear , constant communications across the whole supply chain . This should mitigate the effects of sudden changes in demand and prevent the need for NCNR terms .
September Market Spotlight :
5G Broadband Chipset The first platform-optimised chipset for new radio and broadband IoT devices is launching in the form of the new 5G Chipset . Forecasts predict that the 5G chipset market will experience a Compound Annual Growth Rate of 18-27 percent over the next decade . This predicted growth reflects the central role of the chipset in emerging technologies like smart buildings .
Semiconductors and FABs Consumer demand for end products like smartphones and laptops has declined in response to wider economic conditions . And manufacturers reduced microchip production . But as emerging technologies like AI , Quantum and 5G grow rapidly - so
will chip demand . We anticipate increased demand and recommend that manufacturers maintain production . The microchip supply chain relies on a few regions for materials and production , meaning it is vulnerable to localised events . For instance , the Taiwanese drought caused extended lead times , inflated prices , and missed opportunities . Maintaining production could minimise the impact of similar events in the future .
Lead times
As recent times have shown , it is prudent to prepare for potential disruption . Growing interconnectivity also means more points of friction ; the pandemic chip shortages alone affected over 169 industries . Therefore , across the electronics supply chain , stakeholders should reduce their dependence on a single region by diversifying their suppliers and producers . Likewise , onshoring promises more control over the total supply chain and minimises global points of friction . ■
www . techpoint . co . uk
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