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Editor's Note
For most of us, March 2020 was when life changed. Schools and businesses began to close; face masks were suddenly hard to find and Covid-19 was sweeping the world. By March 2021, several Covid-19 vaccines have been developed and hope for "normalcy" returned.
The new year has also brought semiconductor shortages, largely due to demand from the automotive industry. As the electronics industry prepared for a quarantined, seasonal -- i.e., soft -- Q4, demand for electric vehicles and electronics-heavy autos was building. By Q1 2021, microprocessors and microcontrollers were in short supply and other components were feeling the squeeze.
This is the legacy of Covid-19, and now procurement professionals are faced with fulfilling their BOMs in a shortage market. In this issue, we look at strategies to manage through semiconductor scarcity and lessons learned -- so far -- from the Covid-19 pandemic.
                                                                                March 2, 2021
Managing Through the Semiconductor Shortage of 2021, Parts 1&2 
 
The burgeoning semiconductor shortage of 2021 hit chipmakers “like a ton of bricks,” according to one distributor.  Of course, that’s not the phrase semiconductor suppliers would use.
 
But the supply chain is in the midst of a perfect storm. A convergence of events is creating what’s expected to be a shortage of CPUs, MPUs, memory, and discretes until at least calendar Q3. There were signs in October and November when chipmakers, expecting a seasonally soft Q4, eased back production and channel inventory. They were “comfortable” with current inventory levels in their supply chains, several said.
 
In the meantime, driven by the move toward electric vehicles (EVs) and incentives from the Chinese government, automakers there began stocking up on electronics in December. Globally, automakers overall saw an upsurge in demand as they shook off the quarantine effects of Covid-19. In Q3, chipmakers expected to see most vertical markets move up and to the right. Chip consumption in the consumer electronics sector also rose in Q4.
What the industry didn’t reckon with was the capacity of standalone foundries which manufacture for numerous brand owners and industries. Dale Ford, ECIA’s chief analyst, said Q4 came in a lot stronger than expected across all component categories the association tracks. In December, ECIA’s monthly component index, which has a baseline of 100, saw all component categories except inductors remain above 100.
 
Continue reading; Part 2 
 
The Pandemic Playbook: What Covid-19 Taught Us, Part 1
 
While 2020 is behind us, the continuing global pandemic has taught a host of supply chain lessons, highlighting both the strengths and weaknesses of electronics suppliers, distributors, and manufacturers. In the turn of a calendar year, this traditional industry has gone from embracing the way it’s always been done to looking at new ways of doing business.
 
There’s ample evidence that the pandemic has cost many organizations dearly. “The Covid-19 pandemic has been a rough reality check for our entire economic system,” said Marco Annunziata, former chief economist of General Electric and Scoop’s newest partner. “In some areas, new technologies have helped us react fast: manufacturing platforms have mitigated the disruption of global supply chains; and 3D printing has allowed us to switch production lines and ramp up personal protective equipment (PPE) production. But it wasn’t enough to prevent economies across the world from plunging into a deep contraction, and policymakers now know we need to be better prepared for ‘black swan’ disruptive shocks; and to cope with the ongoing, lower-frequency disruption that will continue to come from protectionist pressure and trade tensions.” 
 
At the same time, some nascent trends were thrown into overdrive by new needs caused by the chaos. “Covid has been an extraordinary accelerant for pre-existing trends,” said Theo Saville, founder and CEO, CloudNC. “The death of the high street, the uptake of cycling, the move to flexible remote working, the rise of retail investment: We’ve seen ten years of progress jammed into 10 months. The strongest and most innovative companies are surviving and even thriving, and coming out on the other side leaner, meaner, and with a reduced field of competition.”
 
Continue reading 
From the AspenCore News Network
Chip Sales Remain Strong in a Challenging Year
Chip sales have remained strong in this challenging year, but we at the Semiconductor Industry Association believe that federal manufacturing and research investments present a crucial opportunity.
Global demand for semiconductors rose to near-record highs in 2020.

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