The shortage of components in the electronic industry is not yet come to an end and the pandemic currently remains the biggest cause of it. While supply chain disruptions hamper business growth, the demand of electronic components keeps staying high worldwide, creating not irrelevant difficulties.
Let's have a look on the imminent trends of the electronic industry.
Market trends in the electronic industry
Since 2018, the electronic industry has suffered many electronic component shortages, although orders have never declined, but in fact have grown at a steady pace. While technological development, driven primarily by IoT and Greentech, has driven the growth of all contract electronics manufacturers, it has become increasingly evident that there is a chronic shortage of many raw materials and consequently components are subjected to fluctuating market conditions.
As a result, these supply chain disruptions bring to negative trends, such as longer lead times and higher costs in the manufacturing. These trends are not forecasted to be resolved by the end of 2021, or even until the second half of 2022 or beyond, without distinctions by region or industry segment.
According to the last Economic Outlook by IPC, higher material costs in the supply chain are reported by 90% of the companies which took part in the survey. Also, the same amount of firms states that the delivery times are still up, estimating it to be more than eight weeks higher in comparison as usual times.
However, there is hope and optimism as the electronic industry keeps performing well despite the challenges, with manufacturing actors reporting rising orders. The IPC study shows indeed that the European electronics industry increased almost by 3% during July and is now up 15.4% over the last year.
End markets for electronics in Europe
In Europe, manufacturing outputs increased by 8.8% over the last year. The three main end markets of the electronic industry are electronic products and devices, the automotive manufacturing and the air and spacecraft manufacturing market
|Electronic outputs has increased by 2.8% in July in the industry of Electronic products, rising to a 15.4% over the last year.||Electronic outputs built for the automotive industry has decreased by 1.1% in July, due to the shortage of components.||Electronic outputs in the aerospace industry increased by 3.6% in July, rising up to 3.9% over the last year.|
How does Hemargroup face these challenges and how can we help you?
At Hemargroup, our goal is to create an environment of innovation and collaboration with our customers. By establishing this type of working relationship, we make it easy for businesses to make the switch to outsourcing without having to worry about any trouble during the transition, while providing a Swiss level of quality and punctuality. By offering a complete portfolio of Electronic Manufacturing Services (EMS): design, engineer, prototype, test, and manufacturing of electronic parts and final products, Hemargroup is in strict control over the full project design & supply journey.
The quality of our processes is the heart of our strategy and our main goal is to offer the best possible service through the whole product lifecycle. In order to achieve our high standards, we start from the raw materials and components, by periodically visiting our supplier network personally. Our own production site and all processes and procedures are ISO and IPC certified. On top of that, our ISO 13485 and AQAP2110 certifications states our experience and quality for the, respectively, medical and military industries.
Facing the challenges of the shortage era, we minimize the risk of components shortage by reacting very quickly and ahead of time, as we have done by forecasting the pandemic negative consequences on the electronic industry. As a result, current delivery times and prices for closed deals are stable and should most likely remain as such.
Our strategic supply chain team is coordinating with and gathering orders from customers as soon as possible, in order to plan in advance the near and far future components needs. We established strong and strategic relationships with suppliers as well as with many international companies.
Our due diligence and suppliers' code of conduct ensure us to have a solid and reliable supply chain. Moreover, our complete Warehouse and Intelligent Stock System can stock, through a State-of-the-Art automatic cabinet system, your components with ideal humidity and temperature conditions. We operate by applying the First-In-First-Out principle, guaranteed by our advanced traceability and material management infrastructure.
Last but not least, the strong collaboration between our engineering and production departments guarantees the application of best practices for Design-for-Manufacturing (DfM), Design-for-Excellence (DfX), Design-for-Procurement (DfP) and Design-for-Cost (DfC), where our engineers are able to overcome obstacles, by finding equivalent alternatives or redesigning your product according to current components availability on the market.
From the development of your idea up to the mass production of your product, Hemargroup is able to assist you not simply as an EMS supplier but as a reliable partner, ready to grow and develop your project. We are therefore ready to support your needs, but also assist any customer in its European relocation, who is looking for a reliable and solid electronics manufacturing services partner.
Don't hesitate to contact us for more information or for requesting a quotation on our services.