March 2018 - Rising lead times of electronic components
Published on: 06/03/2018
GD Rectifiers discuss the growing trend of rising lead times in semiconductor components and shares their advice
Why are long lead times occurring?
A large mix of IoT and the rapid growth of Asian markets has played a significant part in the extended lead times that the industry is now experiencing.
With a relatively slow amount of growth in the semiconductor industry in 2016 and 2017 compared to the boom in 2015, production at the manufacturing houses had slowed to imitate the demand.
The catch-up in demand process was always going to push out lead times and have a momentous affect on the semiconductor industry. We are now playing catch-up with most lead times exceeding 30 weeks with some even stretching 50 weeks.
What is driving extended lead times?
Semiconductor component demand is now soaring in line with the launch of IoT (internet of things) and infotainment explosions. The industry has also seen an increase in mobile and industrial market demands, causing a shortfall of products because when demand is high, the big spenders tend to move to the front of the line.
Global semiconductor sales are due to increase by 9.5% in 2018 according to the latest WSTS industry forecast, with customers either accepting the long lead times or choosing alternative components to avoid project delays.
How is GD Rectifiers handling the long lead times?
We have the technical expertise to be able to offer alternative components from stock or on a shorter lead time to avoid any unnecessary delays.
We work closely with our customers to schedule and plan call-off orders or scheduled orders which helps us reduce the lead times when demand is high.
Customers that have not committed to a scheduled order are often happy to explore alternative components when lead times are pushing out.
What strategy does GD Rectifiers follow for extended lead times?
Communication is crucial, when it comes to liaising with both customers and manufacturers. We notify our customers of the increasing lead times as soon as possible so that we can help them decide what is the best plan of action to take for their projects and to analyse the products lifecycle.
We continue to communicate effectively with the manufacturers to ensure we receive regular updates on current lead times, estimated deliveries on existing orders and component obsolescence.
We work closely with our customers to explore their options and offer alternatives where possible.
What advice would you give to customers to help them manage lead times?
Always focus on lead time trends and stay ahead of worldwide economic influences, product development and industry news. Along with frequent communication with your component distributor, customers should keep ahead of industry news to understand what factors could affect the lead times.
Plan your annual usage and product forecasts on your most widely used components. Whilst you may not want to do this for all of your component requirements it is worthwhile doing for your most prevalent.
Businesses will have to work smarter in order to meet forecasts and expectations, which in some cases will mean taking similar or alternative parts. Engineers and buyers should be open to using mechanically interchangeable parts or the same high-performance parts from other manufacturers when possible to avoid the long lead times.