Material Shortages in the Electrical Industry in 2021

By: | March 18th, 2021

Image by Gerd Altmann from Pixabay

Economic disruptions can cause a shortage of raw materials. Currently, the issue, plus manufacturer capacity issues, are negatively affecting the electrical industry. Additionally, the sector faces a surge in technological advancements that has increased the demand for electronic components.

The component manufacturers are facing a challenge in meeting the high demand. To resolve the issue, some large semiconductor entities have merged. The move has resulted in the elimination of low-margin lines and overlapping production. However, the movement has increased strain on the supply chain of the electrical components.

Given the rapid technology change, there is increased obsolescence of electronic components. Thus, suppliers face a high demand as manufacturers rush to stock the elements that will face production discontinuation.

What will the impact be of the shortage of electronic components?

The Effect on Industrial Development Projects

The most common impact of the shortage of raw materials entails increased lead times. The effect will create a competitive disadvantage for some industries.

Even though the electrical industry faces an occasional demand surge, the 2021 experience is quite intense. Additionally, some suppliers have hiked their prices to unprecedented levels.

However, suppliers and their customers are liaising to overcome the effects of the shortage.

Counterfeits are not the Best Alternatives

Some companies are turning to the use of counterfeits to overcome the effects of the shortage. However, this option is not ideal at all!

Counterfeits can fail unexpectedly because it is difficult to validate their quality. Additionally, companies that use counterfeits can face legal issues because their buyers expect certified electronic components.

How to Bridge the Gap in Shortages

Planning stands as the most ideal solution to counter the shortage. The planning should consider the unforeseeable future. Thus, companies should invest in research and development to enable them to order the right quantities of electronic components.

Companies can also look for additional vendors. The move increases the number of potential sources of the components. These solutions will help companies to overcome the issue of long lead times.


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