Recovery in the electronics manufacturing sector is being jeopardised by component shortages and long leadtimes.
This is the view expressed by UK-based manufacturers at Intellect’s Electronic Manufacturing Services Association (EMSA) meeting in London.
There is evidence of a recovery in the UK electronics manufacturing services industry based on increased demand.
“Confidence in the manufacturing sector is the highest it has been for two years,” Phil Inness, managing director and chairman of EMSA at Axis Electronics told EW.
But the fear is that sales growth will be held back because of the difficulties in getting hold of components in a reasonable leadtime.
“The problem is turning the demand into deliverable product and component leaditmes continue to be the main culprit here,” says Inness.
The situation is getting so bad that manufacturers at the meeting described the problem of getting hold of the necessary components as a “nightmare”.
According to Tony Inskip, commercial director at Stadium Electronics, the signs are that availability is likely to become even more difficult in the coming months.
But is also a view that it will all look a lot better in September.
According to one broadliner, double ordering is a real worry in the market right now, but it will not go on forever.
These things have a way of self-adjusting and this time it is the summer break which could come to the rescue.
There is an expectation that Europe's seasonal slow down in July and August will give the supply chain a break. Suppliers will have an opportunity to get back on track with meeting demand in the market.
Right now the demand for specific parts, especially passive components such as tantalums and film capacitors, is out-stripping supply so lead times are stretching to 24 weeks and longer.
As a result leadtimes are going crazy and double-ordering is commonplace
But come September, after the market has paused for breath, the situation could look a whole lot better.
There's a certain logic in it, but can we assume the many China-based factories shut down for a summer break like production plants do in Europe?
See: Budget gives manufacturers a dose of realism