The results of the first "Electronic Components Out of Stock Survey" in 2021 are released: Ten top findings and three suggestions

Home News Industry News The results of the first "Electronic Components Out of Stock Survey" in 2021 are released: Ten top findings and three suggestions

2022-03-16 241

In order to gain a deeper understanding of the impact of the "historic shortage" of electronic components on enterprises, analysts and editors from Electronics Enthusiasts visited a number of enterprises and experts in the Pearl River Delta and made a series of reports. In order to further comprehensively and in-depth understand the truth about shortages and provide industry decision-makers with real and reliable industry data, conducted an online survey to carry out the "2021 Electronic Components Shortage Survey" for the upstream and downstream of the electronics supply chain. After ten days of promotion among millions of professional users, we collected sufficient user data feedback and compiled the survey results. As a neutral media, we disclosed the results of this survey to the industry as soon as possible, compiled the top ten findings of this survey, and the three major countermeasures that analysts came up with after analyzing the survey results.

1. Manufacturing companies actively participate and survey company samples are effective

Among the samples in this survey, those from manufacturing companies accounted for the largest proportion, accounting for 60.7%, and solution companies accounted for 15.6%. Chip design, distribution agents, e-commerce platforms, etc. also account for a certain proportion. We believe that most of the samples sampled in this survey are chip demand companies, as well as some component supply companies (original manufacturers, distribution and e-commerce platforms). For the true validity of the results, there should be a sufficient sampling effect.

Table 1: Categories of companies participating in the survey, manufacturing and production companies account for 60% Data source: Electronic Enthusiast Network's "2021 Electronic Components Out of Stock Survey"

2. The ratio of R&D and managers is high, and front-line feedback is direct on the truth about the industry.

Judging from the job positions of the respondents, R&D personnel accounted for 66.4%, management positions accounted for 12.3%, and there were also a certain proportion of respondents from sales, purchasing, marketing and other positions. R&D personnel and business managers are the main user groups of Electronic Enthusiast Network, and they are also the most knowledgeable about the shortage situation.

Table 2: More than 60% of the participants in the survey are in R&D positions, and more than 10% are in managers. Data source: Electronic Enthusiast Network's "Survey on Electronic Components Out of Stock in 2021"
From the above two data, we can see that this survey has received strong support and response from R&D engineers from terminal manufacturing companies and solution design companies, and can basically reflect the first-line and real feedback of the current electronic manufacturing R&D personnel on the shortage of electronic components.

3. The interviewed companies cover all walks of life, and the shortages involve all walks of life.

Judging from the industries to which the respondents belong, the distribution is relatively even, with consumer electronics accounting for 19.8%, industrial control accounting for 17.1%, household appliances/smart homes accounting for 14.3%, automotive electronics accounting for 11.9%, network communications accounting for 9.1%, Internet of Things accounting for 8.7%, and medical electronics accounting for 8.3%. This not only shows that the shortage of components this time has received widespread attention from various application industries, but also reflects that the shortage problem covers a wide range of industries.

Table 3: The interviewed companies cover the entire electronics industry. Data source: Electronic Enthusiast Network's "2021 Electronic Components Out of Stock Survey"
The survey shows that nearly 50% of companies have annual revenue of less than 50 million yuan, 11.5% of companies have annual revenue of 50 million to 100 million yuan, and 12.3% have annual revenue of 100 million to 300 million yuan. This shows that small and medium-sized enterprises are more concerned about the shortage of components, and the impact of the shortage on small and medium-sized enterprises is also greater.

Table 4: More than 45% of the companies with a population of less than 50 million have been severely affected by the disaster.
Data source: Electronic Enthusiast Network's "Survey on Electronic Components Out of Stock in 2021"

4. MCUs and power ICs are most out of stock. Passive components that were often out of stock in previous years have little impact this time.

In a survey of the types of components currently out of stock, the results showed that the top five most out-of-stock components were MCUs, power ICs, CPU/processor SoCs, power devices, and analog chips. In addition, sensors, memory chips, GPUs, wireless connection chips, etc. also occupy a certain proportion.
However, products such as MLCC and PCB, which were in short supply during the shortages in the previous two years, did not show particularly prominent shortages this year.

Table 5: MCU, power supply and SOC are most out of stock Data source: Electronic Enthusiast Network's "2021 Electronic Components Out of Stock Survey"

5. Out-of-stocks have existed since last year, but will break out in full force in 2021

Regarding the current delays in components, 41.3% have delivery times of more than 2 months, 24.6% have delivery times of more than 4 months, 21.7% have delivery times of more than half a year, and 8% have delivery times of more than 1 year.
Generally speaking, the normal delivery time for MCUs, power ICs, power devices, etc. is 8 weeks. Obviously, from the survey situation, it has become a common phenomenon that the delivery time is longer, and the proportion of delivery time exceeding 4 months and half a year has exceeded 45%. It can be seen that the entire delivery time situation is very serious.
Many companies have reported that they have been out of stock for half a year or even more than a year. However, the slow response of the supply chain this time is related to the ongoing epidemic and is certainly related to the deintermediation in recent years.

Table 6: According to statistics, shortages have broken out in the past two months in 2021.
Data source: Electronic Enthusiast Network's "Survey on Electronic Components Out of Stock in 2021"

6. Over 50% of original factories in the United States and Taiwan are out of stock, and the situation is not good.

Regarding the question of which regions' supply chains have the greatest impact, the results show that the United States is the most affected, followed by Taiwan, China, Japan, mainland China and Europe. The above are all more than 10%. Among them, the United States accounted for 39.3%, far higher than the second-ranked Taiwan, which accounted for 16.6%. The proportions in South Korea and Southeast Asia are relatively small.

Table 7: The U.S. original factory is most obviously out of stock, and the decoupling between China and the U.S. has a great impact
Data source: Electronic Enthusiast Network's "Survey on Electronic Components Out of Stock in 2021"

7. Orders continue to increase and shortages coexist at the same time, and the situation is grim

Regarding the losses caused by the shortage of electronic components, the most direct one is "orders have increased, but the goods cannot be delivered", which accounts for 37.9%, indicating that many manufacturers are in the position of waiting for rice to be eaten. The selection of "high price, but affordable" accounts for 26.6%, indicating that some manufacturers are under the pressure of rising component prices; the selection of "price is too high and cannot be afforded" accounts for 18.3%. It is worth noting that as high as 15.4% chose "reduced orders and insufficient production". It can also be seen that due to factors such as core shortage, some manufacturers cannot get more orders.

Table 8: The continuous increase in orders and the inability to purchase goods coexist, exacerbating the shortage.
Data source: Electronic Enthusiast Network's "Survey on Electronic Components Out of Stock in 2021"

8. Finding alternative materials and new suppliers is the primary action in the short term, and redesigning the plan is the mid-term plan.

Faced with the situation of shortages and price increases, 39.2% were looking for alternative materials, followed by finding more suppliers, accounting for 24.2%, and redesigning solutions, which accounted for 21.2%. These are the three major countermeasures for manufacturers facing shortages. In addition, purchasing spot goods at high prices ranks fourth as a necessary measure. The most unfavorable options are probably to reduce layoffs and strategic defense. This option also accounts for 2.7%. According to the survey, there are currently no companies that have closed due to shortages.
Out-of-stock companies are looking for alternative materials and more suppliers in the short term, which are good market opportunities for domestic ICs. A reshuffle of the market is inevitable. At present, the redesign plan is a mid-term response strategy, and there have been no companies that have laid off employees or closed down. As the shortage continues, we will continue to pay attention to the development of the industry.

Table 9: Enterprises adopt different methods to deal with it, but they are still struggling without serious consequences.
Data source: Electronic Enthusiast Network's "Survey on Electronic Components Out of Stock in 2021"

9. The top three reasons for shortages are global, and it is difficult for Chinese companies to deal with them alone.

Regarding the reasons for this out-of-stock outbreak, according to survey data, the biggest reason is still the impact of the epidemic, accounting for 25.5%; insufficient production capacity, material shortages, etc. are also very important factors. The first three major reasons are global events and cannot be solved in the short term by China alone.
In addition, the explosion of domestic demand, including the growth in demand for 5G and new energy vehicles, is also one of the causes.
In addition, artificial stockpiling and strategic adjustments by chip manufacturers have also exacerbated the outbreak of shortages to some extent.

Table 10: The top three reasons are frustrating, and China cannot solve them on its own. Data source: Electronic Enthusiast Network's "2021 Electronic Components Shortage Survey"

10. The shortage is pessimistic and is unlikely to be resolved in the first half of 2021.

When asked when the shortage situation will be alleviated, only 6.6% believe that the relief time node will be in the first half of 2021. The industry is generally pessimistic about solving the shortage crisis in the near future.
The vast majority of people believe that the time point will be in the third quarter of 2021 and beyond, with more than 45% believing that it will be from the third quarter of 2021 to the end of the year, and 20.5% of the respondents chose 2022.
According to the overall forecast, shortages will continue in the first half of 2021. It began to ease in the third quarter, but the situation may not become clear until 2022.
This once again confirms the previous view of : This is a historical shortage that is difficult to solve quickly.

Table 11: Less than 10% of people think that the shortage can be solved in the short term Data source: Electronic Enthusiast Network's "2021 Electronic Components Shortage Survey"

Research summary

In this survey, we saw the most authentic voice of the market regarding the core issue of component shortages and price increases.

It can be said that in the shortage wave, the most injured are the small and medium-sized enterprises. Generally speaking, since the original supply of semiconductors is more inclined to large customers, small and medium-sized enterprises lack stable supply chain support. Especially during periods of shortage, not only is it difficult to obtain chips, but they are also susceptible to interference from rising prices in the trade market. Therefore, for small and medium-sized enterprises, the shortage situation has hit them harder and put more pressure on them.
How to solve it? Of course it's difficult. Time is running out, so we would like to make three suggestions for now:
Nowadays, the most lacking chips such as MCUs and power ICs are mostly in mature design solutions. It seems that the chips cannot be obtained based on the original solutions. Therefore, when electronic engineers choose to redesign the solution, it is recommended to choose some newer brands of chips. They may not be from mainstream suppliers, but they also have certain strength, and there is currently no shortage of these chips. For example, the most used MCU abroad is STMicrochipCypress. Obviously, they have the most previous solutions and the greatest demand, and the shortage is definitely the most serious. But there are also some brands that are less popular and difficult to recommend. During the interview, the author learned that they previously had a large stock of MCUs as standard products, and they still have stocks on hand. If the R&D engineers are not particularly busy with new projects, why not consider changing to a new MCU to make a solution?
The second is to consider using domestic materials. Take MCUs as an example. There are several new MCUs in China that have wafer partners and their own supporting peripheral devices. Overall, the supply and design difficulties are relatively low. Once cooperation begins, the security of the supply chain is more guaranteed than that of foreign countries.
Third, as a media that has long served the electronic design and manufacturing industry, it still calls on public opinion to calm down. Whether it is the epidemic, materials or production capacity, they are all very global issues. Complete localization in the short term is unrealistic. The electronics industry is the industry with the highest technological content and has always been a global division of labor. As the largest application manufacturing base, China should not expect to be able to solve supply chain problems domestically like the production of clothing, shoes, or crops. Regarding supply chain issues in electronics production and manufacturing, cooperation with foreign companies has been the mainstream for a long time. Randomly advocating the view of comprehensive substitution cannot solve the problem.

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