In this month’s Sensible semiconductor news update, we’re taking a look at some of the big news stories impacting the electronic component industry, including:
- EMS sector up in Q1 YOY
- Future Horizons forecasts 22% decline in 2023
- EV charging stations ramping up, but will they meet demand?
- Executives reveal top supply chain management concerns for 2023
- Identifying counterfeit markets amid record counterfeit levels
- UK semiconductor industry asking for government financial support
EMS Sector Up in Q1 2023 YOY
The electronics manufacturing services (EMS) sector started off in 2023 in better shape than a year ago. Total EMS shipments for North America were up 10.1% compared to last year at this time. IPC’s Chief Economist Shawn DuBravac notes that orders and shipments are now showing some downward pressure due to a weakening economy.
“The semiconductor market is entering into a major correction cycle as demand for PCs, smartphones, tablets, and consumer electronics has significantly declined,’’ said Gaurav Gupta, vice president analyst at Gartner.
Future Horizons Forecast 22% Semiconductor Market Decline in 2023
Future Horizons issued a new research bulletin to reiterate its forecast of a 22% decline in the market for semiconductors in 2023. This differs greatly from most industry analysts that are forecasting a small single-digit decline.
Future Horizons CEO Malcolm Penn said he does not see how such low, single-digit forecasts can be achieved. According to Penn, key industry fundamentals such as unit demand, manufacturing capacity, and ASPs remain in poor shape.
EV Charging Stations Ramping Up, But Will They Meet Demand?
The Bipartisan Infrastructure Law, passed by Congress in 2022 and signed by President Biden includes $7.5 billion for charging stations with a goal of 500,000 nationwide by 2030. However, research shows that adding half a million public charging stations in the U.S. will still fail to handle the forecast number of electric vehicles (EVs) in the near term.
The European Union estimates it needs to install more than 9 million public charging stations to meet demand.
Concerns over production in China and increased demand are top of mind for the automotive industry. Some manufacturers have already seen lead times of more than 18 months for certain power supplies and some shortages are emerging. The flow of components in the supply chain has clearly not recovered in all sectors.
Executives Reveal Top Supply Chain Management Concerns for 2023
A survey by North Carolina State University (NCSU) and GEP reveals what industry executives are focused on with supply chain management in 2023.
The top priority is reducing costs. 74% of procurement executives said their most important priority is achieving the lowest costs when sourcing. That’s no surprise considering the significant markups and high ocean freight and transportation costs over the past two years. Despite freight costs moving lower, they remain above pre-pandemic levels for most components.
56% of supply chain executives said on-time delivery is their biggest concern. Even as demand slows in the electronic components industry, there are still worries about production in Asia and global unrest that could create continued supply chain disruption and parts shortages.
Identifying Component Counterfeiting Markets
The Office of the United States Trade Representative (USTR) identified 72 online and physical markets engaging in trademark counterfeiting or copyright privacy violations. A record number of counterfeit goods and components were seized in 2022.
The USTR calls out the Huaqiangbei Electronics Mall, home to more than 20 sellers, as the “epicenter of the counterfeit electronics trade.” The mall serves as a distribution hub for counterfeit electronic components, such as chips, capacitors, wires, and LEDs, along with counterfeit devices. While these are physical marketplaces, the USTR says the counterfeiters have ramped up online sales in the same way retailers have grown eCommerce businesses.
This highlights the need for manufacturers to work with reputable and trustworthy sourcing companies for electronic components. OEMs are increasing validation testing to authenticate OEM components.
UK Semiconductor Industry Asking for Government Financial Support
The semiconductor industry in the United Kingdom is asking the government for financial support, with some top manufacturers warning they may be forced to relocate overseas. While Britain isn’t considered one of the world’s larger chip markets, it is home to chip designer Arm. Nearly 95% of the world’s smartphones use chips licensed by Arm.
Their demands come on the heels of the CHIPS and Science Act in the U.S., which provides a $280 billion package and $52 billion of funding targeting a boost in domestic manufacturing of semiconductors. The E.U. also recently tagged nearly $46 billion (€43 billion) for its semiconductor industry.
Meanwhile, China is reportedly considering a $147 billion package to protect its chip industry.
Stay Up-to-Date on Semiconductor News with Sensible Micro
The Sensible Micro team has deep industry connections and is always on the lookout for electronic component news to help you manage your business. Our robust global network often enables us to access critical insights early, even before many OEMs and manufacturers.
Stay informed with Sensible Micro with the electronic components industry news you need to prepare for what’s ahead.
News Sources:
- https://evertiq.com/
- https://www.supplychainconnect.com/
- https://www.techrepublic.com/
- https://www.electronicsweekly.com/
- https://www.cnbc.com/
