As we head into the second quarter of 2022, there is very little change in the global electronics, electrical and mechanical market. Unfortunately, the continuing supply chain issues are still prevalent with no end in sight for many commodities.
Global car giant Volkswagen Group is even predicting the semiconductor shortage will continue into 2024! VW has been forced to halt production at some plants on several separate occasions due to the chip shortage, showing how much of an impact these supply chain bottlenecks are having on global industries.
The ongoing tension between Ukraine and Russia continues, further constraining some raw materials, such as neon gas, used in chip production and steel. With the continued and unexpected disruptions to supply chains, manufacturers are unable to ‘catch up’ to achieve normal levels of sales, with many continually running in backlog making efforts to reduce lead-times seem futile.
Further afield, China has been battling an increase in positive COVID-19 cases, and has put many regions through ‘local lockdowns’ under their ‘zero COVID’ approach to managing and containing new outbreaks, specifically this time, the emergence of Omicron.
Capacity and lead-time issues
Infineon lead-times are stable, but lengthy – up to 52 weeks for some product lines, expedites are only considered after lead-time has elapsed and even then, capacity for escalations is tight.
Panasonic and Vishay resistor lead-times have been observed to be as long as 59 weeks and 99 weeks respectively; some stock is available within distribution.
Texas Instruments are still quoting lengthy lead-times, with orders fulfilled strictly on a ‘FIFO’ basis. Some catalogue stock and direct stock is becoming available.
Electrical products are still struggling with lead-times – Harting, Siemens, Schneider, and Murr are continuing to closely monitor and manage capacity.
Three Murata plants in Japan suffered disruption due to the earthquake earlier in March. All facilities were back to fully operational status within six days.
Toshiba confirmed production was back up and running at full capacity on 28th February following a 6.6 magnitude earthquake off the coast of Kyushu on January 22nd.
Murata completed its acquisition of Resonant Inc. on 28th March 2022. Resonant is a leading RF filter design company, and Murata is hoping they can support their growth and expansion plans into the 5G market where faster communication speeds, with lower latency are constantly demanded.
Littelfuse is set to acquire C&K Switches in a deal reportedly worth $540m. This will further broaden the Littelfuse portfolio, adding to recent acquisitions of Ixys, Monolith Semiconductor, Carling Technologies, and Hartland Controls.
Intel plan to invest up to $88b in European Semiconductor manufacturing – with facilities in Germany, France, and Italy being considered. The aim is for Intel to create a chip ecosystem for a more balanced and resilient supply chain, as reposted by Forbes.
Teufelberger has acquired the Strapping Division of Polish competitor Maillis Plastics Solutions (MPS) as part of a strategic expansion to increase capacities and expand their current product portfolio.
Currently, Jiangsu, Zhejiang, Anhui, and Yiang Xi are in lockdown in China, with the shipment of goods to and from the region restricted and, in some instances, rejected altogether.
On 8th March 2022, the LME suspended trading of nickel and cancelled trades that were made after midnight on this day. This is the first time since 1985 that LME have suspended trading, and it is reported that the trades cancelled were valued at $3.9b. This was a result of the ongoing conflict between Russia and Ukraine and the sanctions in place globally, as well as the recent low-stock environment and high pricing volatility in various base metals.
Bulgin, Harwin, Schaeffler, Lapp, PowerSonic, Leuze, and Rittal have all reviewed and applied portfolio price increases, or surcharges during that last quarter. These continued and rapid increases are in relation to the ongoing increase in raw materials, energy pricing, transportation costs, and manufacturing cost increases and these costs are being pushed by all suppliers across any EMS company supplier portfolio.
Oil pricing has risen sharply over the last quarter, with it peaking at $128 per barrel, although, at the time of writing it had fallen to $104.64 a barrel.
Gold has climbed after a peak in mid-March, trading at $1,931.96 per ounce at time of writing
Silver saw the same peak as oil and gold but fluctuates to fewer extremes and is now trading at $24.4 , however, still quite a significant jump compared to the low observed early in January.
Steel rebar has been fluctuating over the past quarter, 6-month contract pricing is reported to be $911.5.