Front End | Electronic Components Supply Network
memory, resulting in a supply glut and a price crash. Many semiconductor industry pundits believe this is a real possibility in 2H’2027. The majority of customers will hope that Scenario 1 prevails: A glut of High Bandwidth memory products resulting from Scenario 2 won’t help them as there is no general market demand for these devices. In any scenario many customers will fi nd themselves overstocked because they elevated their safety stock in response to generally extending lead-times and possibly because of risky multiple ordering or speculative purchasing activities. It’s likely that customers will simply try to walk away from their over commitments by asking to cancel their existing order backlogs on their suppliers, leaving the entire supply network with a glut of semiconductor memory and possibly, of passive components too. Yet another looming ‘inventory hangover’ that we will all have to navigate a way through.
Call to action In these diffi cult times I encourage all organisations in the electronic components
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supply network to actively and positively engage with all of their partners, both up and down their supply network. A greater focus on identifying and honestly reporting “real” customer demand, rather than artifi cially infl ating order books, will go a long way towards mitigating current problems and minimising the exposure of all to higher levels of risk. Continued successful collaboration throughout the electronic components supply network is essential if we’re to successfully mitigate the issues just around the corner and the others potentially just over the horizon.
For information
Adam Fletcher is chairman of the Electronic Components Supply Network (ecsn), a business association established in 1970 that today offers support to all organisations with an interest in electronic components throughout their entire lifecycle. He is also chairman of the International Distribution of Electronics Association (IDEA), an association of individual country electronic components associations whose objective is to arrive at and share best industry practice.
www.cieonline.co.uk
Components in Electronics June 2026 13
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