Front End | Electronic Components Supply Network
increase future global competition but it’s possible that different and incompatible methods of operation will hinder both equipment producers and consumers elsewhere in the developed world. Much has been said recently about the AI “bubble bursting”, which I feel is a racing certainty but unlikely to happen in the coming year and the winners will make massive market share and revenue gains, just like in the dotcom bubble. The inventory overhang / correction across the electronic components supply network resulting from a combination of over-ordering post the COVID lockdowns and the reduction in demand caused by trade tariffs, is now slowly being ‘consumed’ and will probably balance out by mid-2026. That said, it’s unlikely that the electronic components markets will grow by more than 3 per cent next year but stranger things have happened.
Call to action
Electronic components lead-times remain extended and unit prices are rising. Demand when it returns is likely to be on a global basis which may well stress the ability of the supply network to cope. To protect their organisations systems integrators must place longer term (12 month) scheduled order cover with their suppliers. An order backlog also provides components manufacturers with a useful indication of likely future
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demand, enabling them to better schedule their investment and production capacity appropriately. Scheduling orders with suppliers is a much more stable solution and offers a stronger negotiating position than panic buying. Order cover can usually be rescheduled over time by systems integrators with little or no penalty, allowing demand to be reflected more accurately.
Concluding thoughts
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.
"PERFECT 7"
www.cieonline.co.uk
Components in Electronics October 2025 13
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