ECIA Chief Analyst Dale Ford’s Predictions 2022
The electronic components industry has battled daunting supply chain challenges throughout 2021 as it works to respond to strong end-market demand. To this point, these intractable problems seem to have no near-term solutions. The headlines highlight the trends that will direct the focus of the electronics industry in 2022 beyond the immediate need to source components.
A- Geopolitical Conflict
The resurgence of geopolitical conflicts will threaten to harden trade barriers and stimulate added supply chain disruptors. A multi-front “Cold War” and increasing dangers of a “Hot Conflict” will add to risks facing a global supply chain. Supply chain planning will need to consider even more numerous and powerful external threats.
B- “Sure Shoring” / Reshoring Action
An increased sense of urgency in “Sure Shoring” efforts will motivate actions as geopolitical forces threaten to limit access to supplies and suppliers at diverse points of the supply chain.
C- Direct Government Involvement
More direct involvement by federal and state governments will drive investments to facilitate supply chain flow & efficiency and encourage/foster the return of all types of manufacturing, especially domestic high-tech manufacturing. Expect continued development of proposals and programs to address national security issues related to electronics and electronics components and secure manufacturing capability. Hopefully, attempts will be pursued to coordinate efforts to begin to reproduce the necessary, self-sustaining, core electronics manufacturing eco-systems.
Inflation will add another stressor to the supply chain as external cost increases in sectors such as shipping, energy, storage, etc. add to costs of manufacturers and distributors. As central banks battle inflation with “tapering” of the money supply, the cost of capital will increase and pressure investments, prices, and profits.
E- Artificial Intelligence (AI)
As artificial intelligence (AI) grows in importance it will address the need to analyze and act in a digital world to compete effectively and deliver timely supply chain solutions to continuing unforeseen disruptions.
F- Pandemic and Employer Challenges
The pandemic will not resolve any time soon and this will continue to create labor shortages, both direct and indirect in support industries. Mental health challenges of employees will drive more focus on healthy practices and programs to help. Companies will have to become more innovative in retaining and supporting current employees while also pursuing new avenues of productivity/efficiency to offset difficulties in sourcing new employees.