ADCO Circuits says advance orders offer little-to-no risk, faster delivery
ROCHESTER HILLS, Mich. — As demand surges and the pandemic continues to disrupt supply chains across the globe, Michigan-based ADCO Circuits encourages customers to place their electronic assembly orders now — even if their designs have not been finalized. Prices and lead times for critical components continue to increase and the situation is not projected to improve until as late as 2024.
Every electronic manufacturer across the United States is struggling to get components. The world has seen rapid growth of technologies such as electrification of transportation, AI, 5G cloud computing, and IoT. At the same time, government-mandated global factory shutdowns, labor shortages, port congestion, and a lack of raw materials have hindered production in these and other industries.
ADCO strongly encourages designers to work with assemblers and suppliers to get components on order. “Now is the time to place your orders,” says ADCO VP, Sales Marc Damman. “Even if your designs aren’t finalized, we strongly encourage the industry to secure their component supply as soon as possible by placing assemblies on order ASAP. Planning ahead will help prevent even more costly delays later on.”
Although efforts are underway to increase overall chip production capacity and to re-shore chip manufacturing in the U.S., it will take years to see the impact of production. Since long lead components are typically less than 25% of the total BOM costs, the risks are low compared to long turnaround times.
In the meantime, manufacturers can mitigate supply risk by taking a longer-term view of requirements and preparing ahead for when the shortage ends. Damman notes, “If customers wait until their designs are finalized, they could be adding to the total lead time should component lead times continue to increase as they have in Q1 and Q2.”