Lack of digital elements: the place are we?

The crisis is currently affecting the procurement of semiconductors and, more broadly, the production of devices with electronic components. Many sectors are affected, such as home appliances, the automotive industry and the video game industry. We take care.

Lack of electronic components: what are we talking about?

The lack of electronic components is the industrial crisis that is affecting the whole world today. It is about semiconductors, these electronic chips that enable technologies to transmit, store and process information. From 2020 producers are no longer able to keep up with demand. However, these components are necessary for many sectors, starting with the car sector, electronic devices, bank cards, and even video games. Faced with this, production delays are accumulating and brands are being forced to revise their production forecasts downwards.

The reasons for this global shortage

This semiconductor disadvantage is multifactorial. The health crisis associated with Covid-19 is the first element of explanation. During the pandemic and closure, the demand for electronic facilities (computers, tablets, screens, smartphones, televisions, game consoles, etc.) rose sharply, although the production system was dormant in all countries of the world. Teleworking has also contributed to this increase in demand, as end consumers necessarily need to be better equipped.

in addition, the rapid recovery of the economy surprised producers, which again encountered difficulties in meeting demand. The trade restrictions imposed on China by the US government were also not without effect, not to mention the obstruction of the Suez Canal caused by the container ship Ever Given. Recall, the latter ran aground in March 2021, which caused the temporary closure of some ports and caused additional difficulties in the delivery of electronic products. Finally, Russia’s invasion of Ukraine in February 2022 could further affect the lack of semiconductors. Access to certain materials necessary for the production of chips is disrupted, which could lead to higher prices.

The crisis is expected to continue

If forecasts of this shortcoming were initially optimistic, the situation seems to have changed. Indeed, most experts believe that it will certainly be necessary to wait a few quarters, or even more than a year, before hoping for a gradual return to normal. In other words, the crisis is likely to continue until 2023. This is also suggested by the Supplyframe report. As explained earlier, the reasons for the current crisis go beyond the pandemic episode. For Richard Barnett, marketing manager, the entire supply chain must be adapted to this new era. Pathways consist of rethinking working methods and rethinking outsourcing and inventory management strategies.

(Photo credit: iStock)

Article written

Author

This text was published under the responsibility of its author. Its content is in no way engaged by the editorial staff of Les Echos Solutions.

Leave a Comment