Electrical Component Industry Shortages

By now, you’ve undoubtedly heard about the global supply shortages affecting nearly all industries. From vehicle manufacturing to computer components, nearly every business involved in overseas production has been affected.

The sudden rise in consumer electronics created a demand that the electronics supply chain couldn’t handle during the beginning of the pandemic. Due to worldwide shutdowns creating a pause in production, many companies are now playing catch-up. Moreover, tariffs were imposed on imported Chinese goods, which made the situation more challenging.

Raw materials and bulk electronic component shortages forced manufacturers to remain idle, many with half-finished products. The electronic components in high demand include capacitors, resistors, semiconductors, and other parts. Prices for several raw materials, including copper and steel, have doubled between 2020 and 2021. Semiconductors, microchips, and PCBs are all produced in Asia, so some manufacturers are looking to move their operations back to America to compensate.

Rising prices are also a factor; as demand rises and supply dwindles, costs increase. ElectronicsB2B reported that the semiconductor industry value is expected to increase by 11 percent from 2020 to 2027. Factors such as 5G-based automation, increased chip demand, and geopolitical issues could all play a massive role in whether the semiconductor shortage will ease up any time soon.

Labor shortages are also another large factor in part causing supply deficiency. The number of global working hours was decreased by 8.8 percent due to the worldwide coronavirus pandemic. 

Supply chains are the root of the shortages; the longer they are, the more susceptible to interruptions. This is partly why many suppliers are trying to relocate closer to home, called reshoring. With a more relative location, electrical components will arrive more punctually.

J&P Electrical is a full-service electrical equipment company. At J&P, we supply contractors, end-users, and supply houses with new surplus, quality reconditioned, and obsolete electrical equipment. We also purchase a wide range of electrical equipment such as bus plugs, ducts, panel switches, substations, and transformers. Call us at 877-844-5514 or visit us at https://www.jpelectricalcompany.com.

Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.