To log into your PLUS+ account, enter the email address associated with your PLUS+ subscription below:
For PLUS+ subscription assistance, contact customer service. Nucleic Acid Extraction System
Become a PLUS+ Subscriber today and you'll get access to all Supply Chain Management Review premium content including: Full Web Access 7 Magazine Issues per Year Companion Digital Editions Digital Edition Archives Bonus Email Newsletters
Full Web Access. All feature articles, bonus reports and industry research through scmr.com. 7 Magazine Issues per year of Supply Chain Management Review magazine. Companion Digital Editions. Searchable replicas of each magazine issue. Read them in any web browser. Delivered by email faster than printed issues. Digital Editions Archives. Every article, every chart and every table as it appeared in the magazine for all archive issues back to 2009. Bonus email newsletters. Add convenient weekly and monthly email newsletters to your subscription to keep your finger on the pulse of the industry.
PLUS+ subscriptions start as low as $109/year*. Begin yours now. That's less than $0.36 per day for access to information that you can use year-round to better manage your entire global supply chain.
For assistance with your PLUS+ subscription, contact customer service.
* Prices higher for subscriptions outside the USA.
Email: [email protected] Phone: 1-847-559-7581 Fax: 1-847-564-9453 Mail: Peerless Media, PO Box 677, Northbrook, IL 60065-0677 · United States
Make checks payable to "Peerless Media" for all subscriptions.
Click here to log back in again.
For PLUS+ subscription assistance, contact customer service.
Our records show that you are currently receiving a free subscription to Supply Chain Management Review magazine, or your subscription has expired. To access our premium content, you need to upgrade your subscription to our PLUS+ status.
To upgrade your subscription account, please contact customer service at: Email: [email protected] Phone: 1-800-598-6067 (1-508-663-1500 x294 outside USA)
Become a PLUS+ subscriber and you'll get access to all Supply Chain Management Review premium content including: Full Web Access. All feature articles, bonus reports and industry research through scmr.com. 7 Magazine Issues per year of Supply Chain Management Review magazine. Companion Digital Editions. Searchable replicas of each magazine issue. Read them in any web browser. Delivered by email faster than printed issues. Digital Editions Archives. Every article, every chart and every table as it appeared in the magazine for all archive issues back to 2010. Bonus email newsletters. Add convenient weekly and monthly email newsletters to your subscription to keep your finger on the pulse of the industry.
PLUS+ subscriptions start as low as $129/year*. Start yours now. That's less than $0.36 per day for access to information that you can use year-round to better manage your entire global supply chain.
Already a PLUS+ subscriber? Log In Now.
To begin or upgrade your subscription, Become a PLUS+ subscriber now.
For assistance with your PLUS+ subscription, contact customer service.
Please recheck your login information and resubmit below.
For PLUS+ subscription assistance, contact customer service.
Labor costs continue to rise in the electronics supply chain, but industry research finds materials costs and backlogs easing. (Photo: Pexels/Pok Rie)
Labor costs continue to rise in the electronics supply chain, but industry research finds materials costs and backlogs easing. (Photo: Pexels/Pok Rie)
Editor’s note: Vertical Voices will talk with industry leaders to get their thoughts on the state of their industries. It appears on the fourth Monday of each month. This month, we are looking at the electronics supply chain. If you are interested in future topics, you can see a full list of upcoming topics on our Editorial Calendar.
Electronics manufacturers are continuing to face rising labor costs, although pressures from materials costs, backlogs and ease of recruitment are lessening, according to the latest update from IPC, the global non-profit trade association for industry standards, training, industry intelligence and public policy advocacy for electronics suppliers.
The latest findings come in the association’s February sentiment report. The survey was conducted between Jan. 15 and Jan. 31.
Overall, the monthly survey found that demand in the electronics supply chain remains in expansionary territory and new orders increased to their highest levels since November 2023. The demand outlook is positive, with the Shipments Outlook Index rising 6 points and the Backlog Outlook Index rising 5 points, an indication of expansion, IPC said.
The Materials Costs Index fell 1 point, but the Labor Costs Index rose 5 points to reach its highest level since August 2023.
Survey respondents see labor costs continuing to rise, with 67% of those predicting an increase while just 33% say labor costs will be flat or no change. Other indicators, though, such as material costs (51%), inventory availability from suppliers (56%), inventory availability to customers (58%), orders (52%), shipments (56%) and capacity utilization (64%) find the bulk of respondents expecting no change.
S&P finds falling sector
While component shortages, specifically semiconductors, dominated the news cycles in 2022 and early 2023, S&P Global found things improving in 2023 before a slight dip in December. That continued into February, when the S&P Global Electronics Purchasing Manager’s Index (PMI) dropped to 47.9 on a seasonally adjusted basis, down from January’s 48.8. A PMI above 50 indicates expansion.
The PMI is derived from a survey of purchasing managers in electronics manufacturing. It is a weighted average of survey responses on new orders, output, employment, suppliers’ delivery times, and stocks of purchases.
“February’s Global Electronics PMI signaled that the contraction in the global electronics sector was sustained as we move further into 2024,” said Jingyi Pan, economics associate director at S&P Global Market Intelligence, in a release. “Incoming new orders fell at an accelerated rate in February, reflecting persistent destocking efforts and subdued economic conditions worldwide. This led to a renewed reduction in production after it stabilized in January.”
S&P noted that prices continue to rise, concurring with the IPC data. It did differ from IPC’s data on whether the sector is expanding.
“Due to the weakness in demand conditions, global electronics manufacturers further reduced their purchasing activity at solid pace, suggesting that we have yet to see a turnaround,” Pan noted. “Notably, output price inflation rose in the latest survey period, which may further dampen demand. Global electronics manufacturers opted to share their additional cost burdens, stemming from higher raw material and shipping costs, with clients in February, leading to the fastest rate of selling price increases since March 2023.”
The challenges facing the electronics supply chain are not much different from other supply chains: excessive demand, labor shortage and disruptions. Ultra Librarian, a CAD library firm offering CAD data and tools, also cited a limited number of manufacturers and geographic constraints on those manufacturers—domestic and/or nearshoring manufacturing is non-existent for some firms, it said.
“As shown above, the root causes for the electronic component shortages of 2023 are much the same as was the case for the previous year. Consequently, component availability lead times have shown little improvement since 2022,” it noted.
To counter some of these challenges, Ultra Librarian said some manufacturers are turning to bulk buying to build inventories and protect against price increases, and adopting more automation design software tools. Another challenge facing many electronics manufacturers is the rapid advancement of technology.
“Agile supply chain management practices, continuous monitoring of technological trends, and strategic partnerships with technology providers are essential strategies to navigate the ever-evolving landscape of electronic advancements,” wrote Sejal Desai in an LA Progressive blog.
While the current market may be muted, research is predicting a robust global electronic supply chain moving forward. According to data from Straits Research, the global electronics component market is expected to grow to $328.5 billion by 2031, up from $186.38 billion in 2022.
However, in the short term, component shortages are still possible due to a combination of traditional supply chain disruptions affecting all industries, and the rapid growth of products requiring electronic components.
“Unfortunately, we predict lingering electronic component shortages in 2024, even though demand dipped at times in 2023,” wrote Marc Iacona in a December blog post for control panel manufacturer Simcona.
An example of this growth was provided by Frank Cavallaro, CEO of A2 Global, in an interview with Supply Chain Management Review last year, when discussing the impact semiconductor production has the electric vehicle industry.
A McKinsey report at the end of 2022 found that autonomous driving, connectivity and electrification will drive most of the demand for automotive chips through 2030, accounting for 89% of the total $147 billion automotive semiconductor chip market in 2030.
The report noted that demand for a critical component—the wafer—will increase from about 11 million units in 2019 to 33 million by 2030. Cavallaro, though, said most of the wafer investment taking place in the chip industry is in the sub-11 nm market, not the larger 90 nm space.
“Every single node size except for the 25-45ish range will be in an undersupply situation at current demand levels,” he says, adding that the 25-45 range is on par with demand.
“Semiconductor companies are increasing production of 90 nm chips, but our analysis suggests that the CAGR will remain at only 5% or so from 2021 through 2026—not enough to eliminate the supply–demand mismatch,” McKinsey wrote. “What’s more, OEMs that rely on 90 nm chips for many applications have little incentive to migrate to smaller nodes, because the shift would require additional development and qualification costs, as well as more R&D staff.”
The challenges may be different, but the electronics supply chain—which so much of our current and future society depends on—is not out of the woods just yet.
Become a PLUS+ subscriber and you’ll get full access to all Supply Chain Management Review premium content! Subscribe Today!
Lack of predictive view leaving organizations vulnerable to disruption
Hot-Air Sterilizer Thu, February 29, 2024 - 2:00 pm EST