Front End | Electronic Components Supply Network
from developments in the changing market sector drivers.
Whilst older legacy components are still available, they are no longer the volume drivers and many are in reality declining, with prices rising to refl ect the lower volume of manufacture. This is today resulting in a rapid escalation in the use of proprietary single- source or near single-sourced components.
In summary
The likely move towards a managed market economy displaces the notion that organisations should be located where they have a natural competitive advantage, enabling them to be the most cost-effective producer. Government or customer pressure for inward investment and the division of manufacturing operations between different plants and locations carries an increased risk of cost increases due to a number of possible factors, with the loss of many economies of scale at the top of the list! Without some form of direct subsidy, the cost of producing widget “A” in Arizona will inevitably be higher than in Asia, although the cost of production in Asia will also increase if the ‘lost offshore
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manufacturing’ volume cannot be replaced. This increased cost-of-manufacturing scenario will potentially be played out by thousands of companies and millions of components as technology manufacturing becomes more geographically dispersed. The higher costs will be borne by all customers and then ultimately by consumers. Whilst this may not be a happy thought, the benefits of greater geographic dispersal of components manufacturing, and thereby security of supply, alongside technology transfer, is probably a reasonable outcome for all parties. Welcome to the future normal!
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.
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www.cieonline.co.uk Components in Electronics September 2026 13
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