Why Are Electronic Components Becoming More Expensive?
The main reason the world is facing mounting pricing pressure is Russia's war in Ukraine.
The conflict and multiple international sanctions against Russia have disrupted global food, energy, and chipmaking raw material supply chains. For months now, manufacturers have struggled with shortages and extreme cost volatility for various noble gases, palladium, nickel, platinum, and aluminum. In some cases, OEMs have found alternate suppliers outside of Eastern Europe. But quickly establishing new supply relationships is an expensive and challenging endeavor.
The coronavirus flareups affecting China since earlier this year are another factor pushing up electronic component prices.
Beijing enacted a series of policies called “zero Covid” to contain new outbreaks of the disease with strict lockdowns and rigorous testing. Since many chipmakers maintain production capacity in regions impacted by the quarantine mandates, IC outputs fell by double digits. The new import and export constraints severely disrupted established ground and maritime logistics pathways.
Download this paper and find out how long inflation continues to affect the Electronic Component Supply Chain and how OEMs, CMs, and EMS providers can mitigate the impact of Electronic Components Inflation.
Bonus: Includes the paper "9 Key Considerations When Shopping for Electronic Components Online."