Page 32


www.us-tech.com


October, 2022


Electronic Chip Shortage Solution: Look to Independent Channel


By Kacey Perinelli


the economy humming. One shortage that has plagued the automotive industry since 2018 is the shortage of electronic chips. In automo- biles, chips control many of the features of a car, from heated seating to Wi-Fi hotspots, and without them, manufacturing cannot continue at the level consumers expect. Supply chain disruptions are nothing


S


new; they have become something electronic parts distributors have come to expect. With low-cost components in chronic shortage and extended lead times for delivery, manufactur- ers are considering the use of independent dis-


For many companies, sourcing parts from the independent channel


requires a significant shift in mindset.


tributors to get parts on-time at the lowest pos- sible cost without assuming additional risk. “Some companies make the decision to


place orders with independent distributors the very first day they are in operation be- cause they understand our market and how we operate in it,” explains Mike Thomas, vice president and general manager at Classic Components, a premier independent stock-


The process of authentication is extensive, ensuring chips are legitimate.


upply chain shortages have become a global issue in recent years, adding a stubborn wrinkle to the fabric that keeps


ing distributor of electronic components based in Torrance, California. “But there is an equal number of companies that are hesi-


tant because the chipmakers and franchise distributors have invested millions over the years to de-incentivize their customers from going to the open channel. And I understand that,”


Classic Components has been in busi-


ness for over 40 years and remains one of the only premier independent distributors that is family-owned. The company’s maturity and resources allow it to deliver high quality products with shorter lead times than many of its competitors. In fact, the company can usually deliver parts in two to three weeks that the OEM or authorized distributors may not have access to for 52 weeks or longer.


Keeping Automotive Manufacturing Running


At the beginning of the pandemic, auto-


motive suppliers estimated a decline in con- sumer interest in purchasing a new vehicle and adjusted their projections accordingly. Chip manufacturers then followed suit, pri- oritizing other sectors such as consumer elec- tronics as they anticipated a reduced auto- motive manufacturing capacity. However, demand for new vehicles exceeded expecta- tions, leaving the industry with a demand it could not fill.


Continued on next page


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104