Q2 Component Demand Improves but Instability Reigns

By Barbara Jorgensen, EPSNews

The fortunes of the electronics supply chain can change on a dime. Following two years of severe component shortages, demand is weakening, and inventories are too high, a March study found. One global distributor describes the environment as “normalizing” but cautions there’s still a lot of instability in the 2019 forecast.

component, demand, supply, Fusion

Tobey Gonnerman, executive VP of global trade, Fusion Worldwide

“Based on our survey results and conversations with various supply chains; we believe the industry has yet to see a true bottom as demand continues to be weak and inventories continue to be viewed as too high,” according to Technology Partners Consulting. “Additionally, there’s concern over the macro environment especially in China. We would want at least another month of positive improvement along with an initial positive outlook before we would believe we are at a bottom in this cycle.”

TPC in March surveyed more than 12,000 electronics industry professionals worldwide.

“’Normal’ these days certainly includes a level of instability,” said Tobey Gonnerman, executive vice president of global trade for distributor Fusion Worldwide. “The widely documented growth in board-level component consumption, along with explosive demand across growth sectors like IoT and automotive, has further complicated the supply chain. In general, the hyper-shortage issues of 2018 have subsided, and an increase of excess has followed.”