Electronics component shortages are now so severe that some OEMs believe their growth for 2018 could be stymied if they are unable to get parts.
“We have not missed deliveries yet, but we are on the edge,” said George Whittier, COO at manufacturing and engineering services provider The Morey Corp. “Shutting down one of our customers – say, a Fortune 500 company—because we can’t get resistors won’t go over well.”
Among Morey’s customers are major automotive companies – a market in which demand for all things electronic has exploded. The auto market isn’t growing at unmanageable rates, Whittier said, but the electronics in cars are. The automotive industry, like aerospace and defense, is beginning to use more commercial off-the-shelf parts. Automotive companies are competing with major consumer electronics manufacturers for components. “The Apples and Samsungs of the world are winning that battle,” Whittier said.
More and more companies now believe that there is no end in sight for constrained products. “There are broad-based component shortages that are all demand-driven,” said Paul Romano, COO for independent distributor Fusion Worldwide. “We can start with passives—MLCCs, resistors—and shortages are bleeding into tantalum and large case sizes. Manufacturers can’t keep up with demand and there’s no end in sight.”