Are your power supply stock enough for your product now? The market is changing rapidly. The cost of raw materials has been rised up crazily these days, and the raw material production is also not enough now, which led to insufficient production capacity in the whole electronic industry. The delivery time is also not for sure accordingly. Many customers have to process their orders in advance to catch the schedule.
Take ABS and copper as examples. They have benn rised up by 60% and 40% in only one month. This speed is really crazy.
Despite the raw materials cost rised up rapidly, it is still shortage of stocks serious, especially for IC, even the cost rised higher and higher, it’s also not easy to buy IC. One of our IC supplier said: it’s great that there’s stock for IC now, it’s out of stock in other factories, the higher cost is worthy of its stock.
What’s Driving the Raw material shortage and high cost?
- Increasing Demand. During the COVID lockdown period. there’s high demand for personal computers, smartphones, and other consumer electronics, many of which became necessities for at-home work and school.
- Increasing Demand. Once the COVID is not so serious, People’s work and life are recovering, and a large number of orders need to be arranged, resulting in a rapid increase in demandof the raw material.
- Supply Shortage. During the COVID lockdown period, the raw material manufacturers needed to reduce their cost, and even many factories shutted down as there’re no orders, which leads to insufficient factory capacity and difficult to meet the rapidly growing demand.
How could we do next?
It’ll take much time to increase production capacity to meet the market demand for the suppliers. Even there’ll more new raw material suppliers developed, it also needs market verification.
During this period, all we could do is to process all arrangements in advance, in order to avoid the cost growing too fast, and to catch the schedule, then occupy more market share.