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Techpoint insights
November ’ s electronics market update from Techpoint
Consumer confidence globally remains dented by ongoing geopolitical uncertainty and , in the UK , slow economic growth . While consumer demand for electronics surged during the pandemic , realignment of this continues to impact lead times which are substantially decreased . For many products , these now sit at record lows across the past three years and by the end of 2023 our experts forecast these reaching normalcy .
Despite some products returning to much lower lead times , Techpoint recommends utilizing medium to long term planning wherever possible to mitigate disruption . Maintaining relationships and proactive communication across the supply chain will help all stakeholders as demand can be better measured and inventories managed . Failing to keep channels of communication open and clear may result in customers being pushed into Non-Cancellable Non-Returnable terms for their orders .
November Market Spotlight :
AI and semiconductors – Demand for artificial intelligence ( AI ) technologies has surged and this is set to continue . AI is incredibly energy-intensive , making semiconductor technologies critical to fueling the AI revolution of the future . Although the increased demand will be beneficial to electronics manufacturers , it will trigger a knock-on effect on the ‘ bread-and-butter ’ markets which means shortages across all electronic sectors .
The increase in AI investment will be like the Electronics Vehicle ( EV ) surge seen during the pandemic , which continues to
have a lasting impact on chip manufacturers today . Despite the increased demand , chip manufacturers are unlikely to increase capacity significantly . Techpoint ’ s advice is clear , while lead times will ease , it is unlikely that they will return to pre-pandemic levels . We recommend keeping long-term order books and working closely with manufacturers and distributors as this is essential for effective planning and securing regular supply .
Lead times
As recent years 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 electrical supply chain , stakeholders should reduce their dependence on a single region by diversifying their suppliers and producers . Alternatively , onshoring promises more control over the total supply chain and minimizes global points of friction . ■
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