Electronic Component Market Sales Surge to Dramatic High
Sales growth in the electronic components market has risen dramatically between February and March. How will this affect the electronics industry long term?
According to ECIA’s Electronic Component Sales Trend (ECST) monthly survey, electronic component sales soared upward in March. This survey assessed month-to-month sales growth, indicating expansion between 26 and 27 points in component and end market measures from February to March. As shown in the figure below, the overall component average leaped to 158 points in March, compared to 132 points in February. This market performance has dramatically outpaced the expectations of most and continues to advance in the index that started in January.
While expectations for month-to-month sales growth from March to April are not as strong as the actual measurement from March, it should be noted that any score above 100 indicates growth expectations. Considering this, the overall index average looking toward April is extremely strong.
What does this mean for the electronic component market as a whole?
Demand is finally gaining traction in this re-energized market and stimulating strong levels of excitement for electronic component buyers. However, as illustrated by a semiconductor shortage which began in January, manufacturing capacity has been unable to keep up with demand. An unexpectedly dramatic Q4 uptick in consumer electronics and automotive demand has strained MPU and MCU supplies. Fab capacity for the foreseeable future has already been booked, which has largely left manufacturers without the chips they need. ECIA’s Electronic Component Sales Trend (ECST) monthly survey also measured the changes in lead times. This rising lead time pressure is also manifesting into strong increasing price pressure. Analysts expect these effects to persevere through 2021.
How to Bridge the Gap in Shortages
Planning remains the most ideal solution to counter the shortage. Considering the unforeseeable future, companies should invest in research and development to enable them to order the right quantities of electronic components. Aegis Components is a stocking distributor, allowing our customers to order based on long term demand, and schedule batch deliveries as needed.
During turbulent times such as this, it is not uncommon for counterfeit electronic components to flood the market. For this reason, our seasoned sourcing agents primarily exercise our franchised and manufacturer direct relationships. Additionally, our global network of suppliers has been vetted and refined over the last decade. We also maintain strategically placed locations all around the world to help us locate and secure products globally and offer you the most competitive pricing and terms according to your delivery schedule.
Supplier diversification is another simple but critical measure to ensure a supply chain’s resilience through times like these. Speak with our team today to see how Aegis Components can help you bridge the gap in shortages.
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