Key Electronic Components in Critically Short Supply

Several key electronic components are now in critically short supply, causing a spike in prices and significant delivery delays, according to iSuppli Corp.

In particular, availability is extremely tight for:

analog Integrated Circuits (IC),

memory ICs,

standard logic ICs, and

power management discrete, such as low-voltage MOSFETs and tantalum capacitors.

And as you would expect, shortages are causing prices to rise.

For example, iSuppli reports that among analog ICs, demand is outstripping supply, allowing manufacturers to increase Average Selling Prices (ASPs) for the last three months. The imbalance is expected to persist until the end of 2010, so iSuppli predicts ASPs will continue to rise, while lead times will continue to extend.

Usually, the lead time for these types of electronic components is 10 to 12 weeks. In June, though, the lead time for power MOSFETs and small signal transistors was double that (20 weeks). The lead times for bipolar power devices and rectifiers has climbed up to 18 weeks.

"When lead times enter the 20 week range, they indicate a major schism between component supply and demand," says Rick Pierson, senior analyst for semiconductors and component price tracking at iSuppli. "Supply constraints for electronics and semiconductor components might not come as a big surprise amid the present market rebound. However, specific market and pricing trends are spurring varying degrees of short supply depending on the component market."

Building strong relationships with your suppliers can help mitigate the risks associated with disruptions caused by short supply. After all, when you collaborate with your suppliers, you create an environment that's focused on mutual benefits. If you take a long-term approach with your key suppliers and share strategic guidance, information and skills you'll be less likely to be caught off-guard if delivery of a vital component becomes critically limited.

TAGS: Finance
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