3 challenges facing the electronic components industry
The electronic components industry is at the core of the whole electronics value-chain. Tomorrow’s technologies depend on electronic components and their availability on the market. As a result, silicon vendors are directly subjected to the innovation pressure and must overcome many challenges to stay competitive.
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A faster time-to-market
The electronic components industry is a highly competitive environment. Silicon vendors are in a constant race where the winner will be the first to deliver the next game changing technology. While electronic components are getting increasingly complex, a shorter time-to-market is also expected. This double pressure represents a true challenge for silicon vendors.
55% of engineers say the pace of engineering is increasing. 53% are required to do more with less¹.
New digital actors have emerged, offering silicon vendors digital tools to better adapt the industry’s fast innovation pace. They aim to help them to better understand their customers’ expectations. For instance, some component comparators use insights based on their users’ behaviours to aggregate data and generate detailed reports. With them, silicon vendors can better understand their client base and predict engineers’ future technological needs.
An optimized supply chain
OEMs and design offices often have to plan several design alternatives to prevent components obsolescence and lead-time constraints — and thus guarantee production continuity. To them, suppliers with a strong and reliable supply chain management have a significant competitive advantage.²
In order to improve the performance of their supply chain, silicon vendors need to focus on their inventory management and the accuracy of their forecasting. At the digital era, it is easier than ever to access and analyze detailed data about the market. It helps industry actors to adjust their strategy to the observed changes and possible previsions. For instance, they can precisely decide to restart or stop the manufacturing of specific references at the right time, adjust their lead-times or even adjust the quantity of components stored at the distributors’.
An important talent gap
For silicon vendors, new technologies such as 5G, Artificial Intelligence and autonomous driving implies high investments in design to remain competitive and reliable — which requires talents with various skill sets. They need to attract the right workforce to be able to face all the coming challenges.
“Talent is a top-three or top-five problem facing this industry,” said Dan Durn, senior Vice President and Chief Financial Officer at Applied Materials, at a recent event. “Anything else on that list, if we get the right talent, is solvable”.³
New technologies affect market demand but they also have an important impact on talent acquisition. Indeed, not only does a digital-oriented strategy require new talent sets, it attracts them. As new generations of highly-skilled workers arrive on the market, companies need to offer them innovative environments. Silicon vendors are expected to invest in cutting edge working tools, which would be aligned with their strategy to embrace the future of technology.
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New technologies and digitization might have brought many new challenges to the electronic components industry. They are also part of the solution. Components manufacturers not only need to address future trends with innovative products, but also to adopt new processes to better understand the market’s needs.
Read more in the following white paper: https://wisebatt.com/white-paper-The-digital-revolution-of-the-electronic-components-industry.html
Sources:
¹IEEE GlobalSpec, Jul 12 2018, Pulse of Engineering Survey. https://www2.ieeeglobalspec.com/2018pulse?utm_source=iawpost&utm_medium=20180802&utm_campaign=engineering_survey
²McKinsey, Dec 17 2018, Right product, right time, right location: quantifying the semiconductor supply-chain. http://www.mckinsey.com/industries/semiconductors/our-insights/right-product-right-time-right-location-quantifying-the-semiconductor-supply-chain?cid=eml-weblatest%20innovations.
³Mark Lapedus. Feb 25 2019. Engineering talent shortage now top rist factor. Semiengineering.com. https://semiengineering.com/engineering-talent-shortage-now-top-risk-factor/
