“More Curved Balls in 2022…” Adam Fletcher, chairman of the Electronic Components Supply Network (ecsn). O


n behalf of the publishers and staff of Components in Electronics (CIE) I welcome you to the 2022 edition of CIE Distributor Directory. Published annually Distributor Directory is


recognised as the go-to guide for ‘buyers’ searching for new suppliers and for engineers seeking the latest components with which to update an existing product or to maximise the performance of a new design. It’s in the nature of the global electronics industry to throw up ‘challenges’ and by any measure 2021 was a particularly challenging’ year for everyone involved in component manufacture and supply. We all hoped that 2022 would prove to be a much better year, but it didn’t start at all well: Russia’s invasion of the Ukraine was an early, very low ball that we didn’t see coming and couldn’t envisage escalating so dramatically... Compiled at the end of each year from data canvased from its manufacturer authorised distributor (afdec) members, ecsn’s Forecast 2022 predicted a continuation of the strong growth that the global electronic components markets saw throughout 2021 but at the same time cautioned that if the pattern was reflected in the global economy, a supply imbalance in global electronic components markets could be triggered. We were not surprised when the imbalance happened, but we were surprised that it occurred so early. Given the current market conditions (and in particular the Baltic conflict) it’s probable that we may need to revise our predictions for the second half of the year, but as always, you’ll be able to read the latest ecsn updates on-line and in the pages of Components in Electronics magazine.


Background and 2021 Outcome... Global economies emerging from the COVID-19 pandemic stimulated stronger than anticipated ‘global’ rather than ‘regional’ demand in 2021, outstripping the ability of component manufacturers to supply. This resulted in a step change in average lead-times that ranged from a couple of weeks to over 26 weeks, exacerbated by disruption to long, medium and local distance logistics that ecsn and other industry analysts considered only a minor inconvenience this time last year. Although 2021 proved to be a very difficult twelve months for all organisations in the electronic components supply network, ecsn members and their customers continue to work through the issues - product shortages, price increases, decommits, logistics delays etc. - diligently and pragmatically, enabling the association to report growth of 17.2% in the year, despite the ‘rollercoaster’ market conditions. It was a surprisingly good - if possibly imperfect - outcome for the UK / Ireland electronic components markets and a superb result compared to many other sectors of the UK economy.


ecsn - UK and Ireland Electronic Components Market Forecast 2022... The 2022 Forecast issued by ecsn (see graphic ‘DTAM By Quarter for 2016 – 2022’) in December last year predicted that the UK and Ireland Electronic Components market would continue to grow strongly in the first half of 2022, returning between 11%-to-15% growth and showing around 13% growth at mid-year. For 2H’22 the association predicted that ‘Billings’ (sales revenues) would slow modestly to give an outcome for the full year in the range 8%-to-12%, showing 10% growth at the mid-point compared to the previous year but cautioned that ‘unknowns’ and geopolitical uncertainties could impact the market and skew the final outcome.


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Equilibrium in Supply and Demand...?


Opinions amongst ecsn member companies about when the balance of supply and demand will be re-established in global electronic components markets are many and varied. They range from “around Easter 2022” to “sometime in 2023”, but the mood remains generally positive...! It is my personal opinion that lead times for proprietary (single sourced) semiconductors and interconnect products will “normalise” (return to between 12-to-16-week lead-times) in Q2’22, whilst multi- sourced commodity semiconductors (other than memory chips) will not be on track until the second half. Inevitably some “outlier” components will take longer to normalise and will remain on extended lead-times for a while longer.


At the time of writing (the early months of 2022) demand continues to


be strong throughout the global electronic components supply network. At long last investment is beginning to flow back into the production of semiconductor and other electronic components, a trend that is sadly not being reflected in the availability of the legacy, larger case size MLCC and TFCR components still widely used in the US and Europe. The small number of manufacturers of these components is directly related to a poor return on capital invested, mainly due to pricing pressures which - coupled with the very strong demand for the smaller case size MLCC and TFCR devices that continue to dominate most of the manufacturing capacity in Asia - is a strong dis-incentive for companies to increase production of large case versions of these passive devices. If it continues, this disconnect could potentially trigger the next major components industry supply headache.


Political Investment in semiconductor manufacturing... The investment levels implicit in the ‘Chips Acts’ recently passed in the EU and USA will take several years to really impact manufacturing capacity, by which time the fabs planned will be several generations behind what is today considered ‘state of the at’. Substantial ongoing investment in the entire eco-system for advanced manufacturing is essential if western


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