Current Conditions for the Electronics Supply Chain Remain Challenging


Reading time ( words)

IPC has issued two new industry intelligence reports, the December sentiment of the global electronics manufacturing supply chain report and the December economic outlook report.

Material and labor costs continue to be the two largest issues facing the electronics supply chain while inventory and transportation constraints continue to be a major impediment to growth.

Results from our monthly sentiment study find:

  • Nine in 10 electronics manufacturers report rising materials costs with nearly three-fourths reporting rising labor costs.
  • While order flow remains positive, higher costs are hurting profit margins; 58% reported expanding orders, but 40% reported a decline in profit margins, and 19% reported profit margin improvement  

The December economic outlook report shows:

  • Despite uncertainties, supply chain disruptions have resulted in unfilled pent-up demand that should help carry growth into the first half of 2022. While we have lowered our forecast somewhat, 2022 should still be a historically strong year.
  • Incoming data is consistent with IPC’s monthly sentiment study. There is capacity to buy, among both consumers and businesses, but supply chain constraints have limited potential growth in spending and investment. Manufacturers report strong order growth, but growth is being offset by higher costs and as a result profit margins are declining.

Share




Suggested Items

Four Silver Linings in the Stormy Clouds of Pandemic, Supply Chain, and Inflation

09/14/2022 | Dr. Ronald C. Lasky, Indium Corp.
It may be difficult to see any bright spots in the current and recent economic situation. We have all experienced the devastation of the pandemic, supply chain issues, and most recently, inflation. However, as a senior technologist for an international materials supplier (Indium Corporation) and a professor of engineering at an Ivy League research university (Dartmouth College), I offer these four silver linings for those of us in the electronics industry.

Thriving Through Greater EMS Collaboration

08/23/2022 | Chris Peters, USPAE
Events of the past two years have clearly demonstrated the value of strong trading relationships. When materials become constrained, as in the recent microchip shortage or any of the pandemic-driven supply chain snafus, the companies that have those materials have a choice to make. Which customers will be put at the front of the line, and which will be placed at the rear? Too often, company executives assume that since they are a large buyer, they automatically will be prioritized when supplies are constrained. Research has shown that this is not always the case, and that assumption can leave a company in a weakened position.

New Book from I-Connect007 Examines Evolution of Electronics Industry NPI

08/01/2022 | I-Connect007
The Electronics Industry’s Guide to… The Evolving PCB NPI Process is the first book in I-Connect007’s new The Electronics Industry’s Guide to… technical series. This valuable resource is for all segments of the electronics interconnect industry.



Copyright © 2022 I-Connect007. All rights reserved.