Front End | Electronic Components Supply Network
to dedicate more of their existing manufacturing capacity to meet the demand and invest in new ‘state-of-the-art’ facilities, while other manufacturers are struggling to overcome the technical and financial barriers to entry to this market. However, some other memory manufacturers are now taking this new opportunity to increase their revenue by meeting the existing wide customer demand for more conventional DRAM and FLASH devices, now that increased market prices are enabling them to make a profit. Turbulence like this is nothing new in the semiconductor industry but even more uncertainty in the market is to be expected when a decline in demand or overcapacity eventually forces pricing back down to unprofitable levels.
Call to action
I apologise, but I continue to reiterate the message: Customers must place longer term (twelve month) scheduled order cover with their suppliers! Over time a healthy, well managed backlog has proved to be a much more stable solution than panic buying. It ensures continuity of supply for the customer and also provides component manufacturers with a good indication of likely future demand, enabling them to schedule their investment and production capacity appropriately. Manufacturer authorised distributors who serve over 98 per cent of the customers are always open to negotiate order backlog rescheduling over time to reflect their customer
Collaborati on Throughout the Electronic Components Supply Network to Benefi t Members and the Economy…
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organisations’ real demand when things change, as they do.
Concluding thoughts Sadly, all the indicators are that the current supply situation in the electronic components market is not going to improve any time soon. It may even deteriorate further (and longer?) than many analysts forecast, and availability problems could grow to encompass many hitherto largely unaffected device types. To help mitigate future supply and demand imbalances I urge all organisations to play their part in the success of our industry by participating and contributing to the collaboration and communication process both up and down their supply network. When well- managed, this industry interaction costs very little but offers great returns for the time invested.
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.
…Promoti ng Positi ve
www.cieonline.co.uk
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