Which Way is the Digital Iron Curtain Blowing?

Two events are shaping the way the world looks at the high-tech industry today.  The first is the trade war between the two tech giants—the US and China—and the second, the current Covid pandemic, which has accelerated the first event.  In fact, the pandemic has served as a catalyst to make the world sit up and realize it has put all its eggs in one basket in allowing China take over the crown of “the world’s factory”.

With the pandemic effectively disrupting global supply chains, many high-tech companies want a migration of production units from China to new factories in India, Vietnam, and Taiwan—they are targeting several manufacturing ecosystems in such countries.  Moving out of China will help address concerns of security and intellectual property, and avoid US tariffs thrown up the by the trade war.

In addition to and possibly related to the trade war, the US Department of Commerce has been adding more companies and agencies to a running blacklist of Chinese firms that they have banned from doing business in the USA.  The special focus has been on companies specializing in machine learning, artificial intelligence, telecommunications, and digital surveillance.

It is as if the US is throwing a digital iron curtain over the high-tech industry, with China on one side of the curtain and the rest of the world on the other.  The major impact has been on the telecommunications side, with 5G or the fifth-generation mobile network poised to enter the western markets in a big way.  There is a huge global competition for securing intellectual patents and market consolidation, as 5G could be the defining breakthrough for technology for at least the coming decade.

The Rise and Rise of Huawei

The trouble is, Huawei of China, is the leading provider of 5G mobile technology in the world, and the global influence of the telecommunication giant has stoked heartburn and fears in several countries, including the US.

This has led Washington to impose sweeping restrictions on Huawei, claiming certain Chinese intelligence laws can allow the Chinese government to force Huawei to spy, sabotage, or take similar actions on its behalf.  Although there is no concrete evidence to support this has really happened, the latest allegations of TikTok collecting user data for passing on to mainland China gives credence to this view.  President Trump has imposed a ban on the use of TikTok and WeChat, both popular Chinese apps for mobiles, in the US.

Washington is not alone in airing such suspicions.  Other countries such as Australia have also expressed concern about the Chinese government using Huawei to spy through backdoors installed in 5G infrastructure, allowing Beijing control over public utilities and communications networks in other countries.

As far back as 2012, a report from the US House Permanent Select Committee on Intelligence had concluded it was risky to use equipment from Huawei and ZTE, another Chinese telecommunications company, as they could “undermine core US national security interests.”  In 2018, six US intelligence chiefs, including those of the CIA and FBI, seconded this view.

The US suspicion may have stemmed from the special treatment Huawei was receiving from the Chinese government and military since 1996.  Beijing was explicitly supporting domestic telecom companies, with special emphasis on Huawei, to the point of preventing foreign domination of the industry.  For instance, Huawei received easy financing and subsidies to the tune of $222 million in grants from the Chinese government in 2018 alone.

Such support from the Chinese government has allowed Huawei and other companies price their equipment far below the rates of other foreign competitors.  For instance, Huawei was able to outbid the Swedish firm Ericsson by 60 percent for network equipment in the Netherlands for the national 5G network.  Experts are of the viewpoint that prices quoted by Huawei were so low, they may not even have covered the cost of production without subsidies.

According to industry experts, however, there is merit in Huawei’s claim that its low prices are due to technological expertise and not government interference.  The annual R&D budget of Huawei is one of the largest in the world.  In 2018, it stood at US$15 billion, close to that of Amazon and Alphabet (Google).

Restricting Huawei and Others

The United States has blocked Huawei in many ways. Since 2018, the Trump administration does not allow US federal agencies to use equipment from the Chinese telecom giant.  Regulators forced AT&T to step away from a deal with Huawei to sell their smartphones.

The following year, Trump signed an executive order that banned US companies from doing business with Huawei.  As the Commerce Department has added Huawei to its entity list, the company cannot buy US goods—microchips, lasers, software, and more—unless the government gives it permission.  Since then, the entity list has grown, including more than a hundred affiliates of Huawei.  Extending Trump’s executive order until 2021, the department has also blocked foreign semiconductor manufacturers using US machines and software from shipping their products to Huawei without a license.

Apart from corporate leviathans like Huawei and ZTE, the Commerce Department has been adding other smaller but still significant players in China’s technology growth and international expansion to their entity list.  This includes Hikvision, a global leader in the security industry, and Dahua Technology, a large video surveillance and security camera company.

Other names include Iflytek, a voice recognition company; Megvii Technology, a facial recognition company; SenseTime, an artificial intelligence SAAS platform; Meiya Pico, a digital forensics company; YITU, an AI research company; and Yixin Technology, an information security company.

A bitter trade war has locked in the two largest economies of the world, US and China. The dispute has led to the US and China levying tariffs on one another’s goods worth hundreds of billions of dollars.  On one hand, the US President accuses China of theft of intellectual property and unfair trading practices.  On the other, China perceives the US as curbing its rise as a global economic power.

Fallout of the Trade War

Although the US and other western nations cite the close ties of Huawei to the Chinese government as their reasons for imposing sanctions, many remain skeptical.  To them, the two economies are deeply intertwined, at least technologically, and banning Huawei seems like a loaded excuse, especially when US military contractor Lockheed Martin relies on Chinese subcontractors to supply them with essential circuit boards, which they incorporate in their F-35 fighter jets.  Lockheed Martin then sells these jets around the world to several nations.  In turn, Huawei relies on US companies for chips, lasers, and software.

With the above in mind, banning Huawei from the high-consumer markets looks more like an effort by western nations to insulate high-tech markets such as 5G for local corporations.  Apart from seeking to undermine Huawei on the global market by banning their products, western nations have been actively funding technology competitors in Europe such as Nokia and Ericsson.

With 5G estimated to produce nearly 22 million jobs by 2035, and US$3.2 trillion in global economic output, it is no surprise western nations worry about Huawei leaving them behind, and are scrambling for technology patents and markets.  For instance, although Canada has not banned buying 5G technology from Huawei, it is funding the competition to stunt Huawei’s international presence.

Since the ban, Ericsson and Nokia have been filling the 5G vacuum—Ericsson holds 93 commercial contracts of 5G, and Nokia has 63—leaving only 50 for Huawei.  However, this may not last long, as Huawei is actively seeking industrial self-sufficiency from the sanctions placed on it.

Where are we Heading?

On one side, China is creating a political uncertainty by holding military maneuvers in the South China sea, and aggressively entering territories of India, Nepal, and Bhutan.  On the other, its trade wars with the US are escalating and tensions with the western nations on technological hegemony increasing.

All this is causing a digital iron curtain, splitting the supply chains of the world between the Chinese and the non-Chinese.  It is still not clear which way the digital iron curtain is blowing, with the technology industry becoming a key arena for playing out geopolitical tensions.

This will surely affect the day to day trading of electronic components.  It is hard to predict which products will be most affected, so one can preemptively secure a safe and steady supply of components.  AERI is ready to step in and assist your company should there be a shortage on any of your components.

To lock in your electronic components and to avoid production slowdowns, please contact one of our Search Experts by email; USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com

Bringing Back Chip Making to the USA

The present US-China trade spat has acquired an unusual centerpiece—the semiconductor.  Although most people are ignorant to their significance, our daily lives are greatly influenced by them, most industries would come to a screeching halt without them, and every electronic device has some incorporated within them.

Almost all sectors of the US economy depend on semiconductors, the key foundational technology for anything digital—telecommunications, the Internet, transportation, healthcare, 5G, artificial intelligence, quantum computing, and more.  America’s national security exclusively depends on its continued leadership in semiconductors, as chips pave the way for the US to defend its critical infrastructure and to field its advanced weapons systems.

Crux of the Problem

While US is the undisputed global leader in the development of semiconductors, designing many of the leading chips for cutting-edge applications, its leadership in this critical technology is vulnerable to numerous challenges.  Topmost on the list of challenges is the widening supply-chain gap.  The realization is beginning to sink in that semiconductor supplies are far too reliant on foreign suppliers, mainly the Chinese.  For advanced chip manufacturing, US chip designers today must rely heavily on suppliers in Asia.

At present, of the global semiconductor manufacturing capacity, the US accounts for only 12%, Asia 79%, distributed among China, Taiwan, and South Korea, while Japan, Europe, and SE Asia account for the balance.  However, the Chinese government is aggressively funding the construction of several new semiconductor fabs or foundries with an eye to cornering a major share of chip production by 2030, targeting up to three times the global share of US chip manufacturing.  Over the long term, this is likely to disrupt the industry.

Increasing geopolitical tensions between US and China, and enhanced Chinese state-backed competition can lead to the US losing market share in China.  This may allow China’s share in chip manufacturing to increase even further.  Although there is growing awareness in the US about the situation, addressing the issue requires significant public and private investments, given the complexity and costs involved in increasing chip manufacturing onshore the US.

Exploring Initiatives

Fab construction is capital intensive, and in countries around the world, government incentives drive it largely.  Comparatively, the US does not offer much government support, providing few incentive programs for manufacturing semiconductors.  For instance, around the world, other governments offer generous cash grants, tax incentives, and other subsidies to the extent of 40% of the cost of constructing and operating a fab.  The US semiconductor manufacturing lags in growth mainly due to unfair competition from the competitor’s government incentives.

Congress and the Administration are considering policies for advancing semiconductor design and manufacturing development in the US; fab construction and research in the US.    To compete on price will require significant incentives to ensure the US drives the next generation of semiconductor innovation.

The House and Senate have both passed new amendments to the National Defense Authorization Act in the US.  This is the annual bill authorizing military spending.  Although these addendums do not provide the funding, they offer a framework for creating multiple grants of up to US$3 billion to chip manufacturing companies based in the US.  Names include Micron, Global Foundries, Intel, and branches of other large chip-makers such as Samsung (South Korea based), for building and expanding chip manufacturing facilities in the US.

The addendums will also provide private companies or US universities grants for research in semiconductors, either through DARPA, the Defense Advanced Research Projects Agency, or directly.  In addition, a National Technology Center may also be set up, serving as the organizational control point, and clearing house for chip manufacturing in the US, in addition to functioning as a new research and development facility.

The above incentives for setting up facilities for domestic chip-making in the US could have multiple benefits.  Apart from protecting national security and enhancing broader economic advantages, funding new research, and building new manufacturing sites, it would also create new highly skilled jobs.  While significantly expanding the number of highly skilled and well-paid workforce, these investments will significantly enhance the present jobs in America.  As the semiconductor industry will surely drive innovation in the economy, the US semiconductor industry is likely to contribute millions of jobs in future industries.

On the practical side, the initiative will also decrease the US dependence on foreign chip manufacturers.  The proposed efforts are of immense advantage to all types and sizes of US-based semiconductor companies.  Apart from the large businesses mentioned above, other lesser-known companies will also benefit, such as Texas Instruments, Xilinx, or Marvel, and even smaller companies like National Instruments, Silicon Labs, and Lattice Semiconductors.

Moving Forward

The US is the world leader in semiconductor technologies for making chips that drive several industries.  Almost every industry in existence uses these chips, be it for wireless networking, making medical equipment, automotive, manufacturing equipment, or others.  The path America is taking to maintain that lead and improve its share of global manufacturing is in the right direction.  The industry needs the push towards increasing the amount of research and manufacturing support, while we proceed to a future driven by technology.

Semiconductor research and development companies in the US presently contribute the second-highest rate of research investment of any industry.  While this high level of investment has driven innovation and growth throughout the economy, it has also fueled the rapid pace of innovation in design and development in the semiconductor industry.

Whether the US-China trade war subsides or flares up further, the US is making an all-out effort to substantially improve onshore semiconductor manufacturing growth.  This will likely influence the daily trading pattern for electronic components.  Although it may be difficult to predict which semiconductor devices the trade spat will likely affect most, AERI can step in to help preemptively secure a safe and steady supply of components should there be any shortages.

Please contact one of our Search Experts by email; USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com.

When Will the Electronics Industry Rebound?

Article reposted from All About Circuits

Just like other business activities, the electronics industry was adversely affected by COVID-19-related shutdowns with many companies facing reductions in purchase orders and, consequently, profits.

Some segments of the electronics and semiconductor industry have suffered more from the ongoing crisis, including those producing components for consumer electronics and automotive technology.  Companies specializing in parts for communication tools and healthcare equipment were typically less affected because their work was deemed essential and thus they were allowed to continue their operations.

Intel’s Fab 42 facility in Arizona will create 10,000 jobs. Screenshot used courtesy of Intel

As restrictions are lifted and more businesses open up, some analysts have predicted that most of the semiconductor industry will rebound later this year or in early 2021.

In this article, we summarize some of the recent predictions about when and how the semiconductors and electronics industry is likely to recover from the losses suffered as a result of the COVID-19 pandemic.

The Impacts of Supply Chain Shortages

At the start of the COVID-19 outbreak, semiconductor supply chains were disrupted because many electronics manufacturers and suppliers are located in Asia.

SEE FULL ARTICLE HERE

 

Please contact one of our Search Experts by email; USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com.

Why the Electronic Manufacturing Supply Chain is So Complex

Article Reposted from EPSNews.com

The complexity of global supply chains depends largely on what and how much you’re sourcing.  With some materials — like paper — you’ll find a suitable supplier almost anywhere in the world.

However, in the electronics industry, things are not so straightforward.  Multiple commodities from multiple suppliers across various geographic locations mean global electronics supply chains are much trickier to manage.

One of the main challenges of electronics is the sheer volume of parts that go into one product.  Some of these parts also need to have approvals, and suppliers will require certain certifications.  Bespoke parts are often manufactured to specific designs, too — meaning rigorous testing and sampling are necessary to ensure they meet meticulous quality standards.

Why is a stable supply chain so important?

A good supply chain is all about remaining competitive.  If a customer comes to you wanting a specific part for a project, you need to know that you can deliver through a trusted chain of suppliers.  As such, having a range of approved global suppliers is key to ensuring you never have to reject new enquiries.

A strong network of suppliers also allows you to free up capacity and manufacture a range of products more cost-effectively (and at short notice) — which, ultimately, translates to a better price for the customer.  This is why so many companies in the electronics sector will have at least some offshore suppliers.

However, supplier selection is crucial. It’s not enough to have a good website or a good booth at an exhibition — you need to see the factory and the quality of the parts they produce first-hand.  When customers place orders, you need to know exactly where their products are coming from.

It’s also important not to cast the net too wide.  Once suppliers are spread out too far, the chain becomes more difficult to manage, and you lose control of where the materials come from.  Instead, it’s crucial to build long-term partnerships with suppliers that share and uphold your ethos, integrating them into your business to ensure a fluid process.

What is the impact of external factors?

SEE FULL ARTICLE HERE

 

To lock in your electronic components and to avoid production slowdowns, please contact one of our Search Experts by email; USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com

E-Waste Not Getting Any Better in the US

 

As our world becomes more and more reliant on electronic devices for day to day life, the recycling of those that are no longer the latest model is imperative.  As a society, we must protect our nation and world from the terrible effects that we are witnessing as these dangerous chemicals are filling our landfills and being illegally exported to developing countries (see article).

One might think that the US is up to par with other developed countries when it comes to e-recycling, but we are far from leading the way.  The US must pass binding regulations that make it next to impossible to thwart the system. Why is it so tough to pass e-waste legislation?

“Awareness is definitely a major challenge,” explains New York Democratic congressman Espaillat.  “When I speak to some members, they don’t have the slightest idea what this is about.”

Education of politicians and citizens is also key, adds Espaillat.  Yet recycling struggles to be a ratings grabber.  “Waste management is not a sexy issue to talk about on the seven o’clock news,” he says.  “But as more reports come out, I think it’s going to become more of a common-sense issue for members of Congress.”

Those millions of old motherboards and TVs consoles rotting in landfills and warehouses aren’t just eyesores.  They amount to a massive health hazard.  While electronics waste comprises only 2-3 percent of America’s solid waste stream, the lead, cadmium, chromium, and other materials in aging circuitry account for 70 percent of the hazardous material in landfills, according to an EPA report.

The Basel agreement — designed to track and reduce the movement of hazardous waste between developed and developing nations — entered into force in 1992.  As of late 2018, 186 states and the European Union have ratified it and follow its legal framework.  The United States has signed the Basel Convention, indicating an intent to ratify, but is the only developed nation that hasn’t actually done so!

“Almost every environmental treaty created in recent years because the world has said ‘We need this to move forward,’ the U.S. is outside and we’re really looking like a renegade country when it comes to the environment,” says Puckett.  “We’re a rogue country and that’s how the world sees us.”

Theoretically, all of the countries who are a party to the existing treaties should be disallowing shipping containers brimming with hazardous e-waste from the United States, but corruption, intentional mislabeling, and lax prosecution make it possible.  Since China stopped accepting many recyclables from the U.S., including e-waste, other countries in southeast Asia have stepped in to grab a piece of this toxic business.  Claire Arkin, a spokesperson for the Global Alliance for Incinerator Alternatives, says villages in Indonesia, Thailand, and Malaysia have turned into dumpsites for e-waste and plastic in the year or so since.

At the federal level, EPA regulations require businesses to properly dispose of and recycle electronic goods, but they don’t go into great detail about what is and isn’t legal.

What can someone do now since the US government has not created stringent laws to address this urgent issue?  There are many e-recyclers out there, but the industry needs to be checked more carefully.  Many seemingly legit scrap haulers may have green leaves slapped on the side of their trucks and advertise environmentally friendly solutions while still dumping their stockpiles in landfills or overseas.  Overall, recycling in the U.S. is relatively bad.  Of the top 25 recycling countries in the world, the U.S. is 25th, according to a 2017 report developed by the environmental consultancy Eunomia.  The same report also notes that European countries typically recycle 30 percent of their plastic waste while the U.S. only manages to recycle nine.  (A large part of e-waste is plastic.)

In the absence of comprehensive U.S. e-waste legislation, several NGOs have stepped in to create frameworks for “certifying” the work of recyclers, most notably R2 and e-Stewards.

The ISRI rep also downplays the concern about sending e-waste from the United States to the developing world, quoting it at less than 1 percent of all e-scrap exports.  (A 2016 study by the Basel Action Network using GPS trackers placed in old electronics found that 40 percent of U.S. e-waste is exported with 93 percent of it going to the developing world.)  Does the ISRI rep think any legislation or regulations should be put in place to stop the environmental hazards created by consumer e-waste?  “I’m a person who believes more in the carrot than the stick,” responds Johnson.  “If you tell people why it’s important, people generally want to recycle and do the right thing.  If you make it convenient for them, they’ll do it.”

Here are some other ways that you can be an agent for positive change for e-waste;

  • The next time you want to purchase a new computer, laptop or printer, check out the government’s EPEAT Registry, which lists eco-friendly tech choices.
  • Want to show your support for the “Secure E-Waste and Recycling Act”? Consider calling the office of one of the sponsors (Congressman Espaillat, 202-225-4365; Congressman Cook, 202-225-5861).
  • In November of 2019, Amazon.com set up a test of electronics collection bins at Amazon Locker locations in 10 U.S. cities, including Austin, Chicago, Columbus, Seattle, and Pittsburgh.  Use the boxes and leave feedback about the program on the e-tailers’ Second Chance page. Staples and Best Buy offer similar free electronics recycling programs.
  • Have a piece (or an entire office-full) of technology you want to recycle?  Make sure the processor you hand it to is approved by R2 or e-Stewards.

If you have excess electronic components, don’t just throw them away. AERI offers many different excess inventory solutions to make your job easy.  Please contact one of our Search Experts by email; USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com

 

Digital Trends (2020, February 27).  The United States has a colossal e-waste problem.  This is why [Blog post].  Retrieved from https://www.digitaltrends.com/cool-tech/e-waste-recycling-united-states/

Autonomous Cars – How Much Longer?

If you are thinking your kids will not need to learn how to drive, think again.  This short summary of where automated cars are at now and how long it will take until vehicles are fully automated will help you determine if you will have to go to their 1st DMV appointment.  If you were to ask average people today if there are self-driving cars already on the road, 23% of them would say yes.  Although there are some automated features on vehicles today, they are no cars that are fully autonomous.  Surprisingly experts say that we are a few decades from automobiles without a steering wheel, requiring at least some driving input from passengers (see article).

It is helpful to know the established levels of autonomous driving cars for this discussion.  Five levels have been established;

Level 1: Driver Assistance – This allows a car to steer or brake autonomously for the driver, but not at the same time, requiring the driver’s full attention.

Level 2: Partial Automation – As in level 1, the vehicle can steer or brake, but in contrast level 2 allows the vehicle to do those simultaneously, still requiring the driver’s full attention.

Level 3: Conditional Automation – This level enables a vehicle to handle most aspects of driving, allowing the driver to take their eyes off the road temporarily.

Level 4: High Automation – The vehicle takes full control, under the right conditions, so the driver can focus on other tasks. The steering wheel and other controls are present for when the conditions are not ideal for autonomous driving.

Level 5: Full Automation – The car takes full control without any assistance from the passenger. There is no need for a steering wheel or any other driving controls.

It is believed that current technology has brought us to a level somewhere between 2 and 3, but some think there are cars that meet level 4.

What is it that is holding us back from attaining a fully automated vehicle?

  • Our roadways are not ready yet
    1. The proper type and amount of road signs necessary for cars to utilize
    2. Wireless connections to the grid would be helpful for cars to determine the traffic infrastructure
    3. Lane and road markings are not up to par in many locations
    4. Pot holes/obstacles
  • Cars need to communicate with each other
    • This is currently in development and being tested
  • Governments must make decisions and establish guidelines
    1. Who is liable when an automated vehicle causes and accident
    2. How to navigate the roads while traditional non-automated cars exist
    3. The economic pushback that is inevitable from hired drivers (trucking, taxis)
    4. What are the appropriate weather conditions

A timeline for fully automated cars is so difficult to predict.  Some optimists believe we will be at level 5 in just a few years, but many engineers involved in the effort seem to think that we will achieve level 4 in this decade, but level 5 is decades away.

Electronics are the foundation for autonomous vehicles.  If you are searching for a hard-to-find electronic component, please contact one of our Search Experts by email; USA calisales@aeri.com , Asia ausales@aeri.com, or Europe uksales@aeri.com

Disruption in the Electronic Component Supply Chain

AERI is seeing increased demand for our hard-to-find and long lead time business sectors, driven primarily by a disruption in the supply chain.  Every business is seeing fairly dramatic changes; fortunately not all negative.  The COVID 19 induced plant closures for some manufacturers in combination with exponentially increased demand for remote work/school items as well as some other niche products is creating havoc for many electronic component types.  Some overall positive examples of broader industries are; home products and furnishings +97%, DIY products +136%, electronics +26.6%, telecom products +18.6 %.  The obvious losers are; automobiles -53%, travel -44%, and retail sales -16.4%.

Deloitte published a report stating that, “COVID-19 might become the black swan event that forces the semiconductor industry to transform its global supply chain model.”  An April survey from the Electronic Components Industry Alliance’s (ECIA’s) Chief Analyst, Dale Ford, showed that concern about the impact on the production of electronic components increased by 12 percent (See article).  The report also suggests that all businesses have been impacted to some degree and that 90 percent of respondents expect a serious to severe impact on their businesses over the next two to three months.

On a brighter note, while the economy is still struggling, data from Luminati Networks and QuickLizard suggests that sales of consumer electronics such as tablets and laptops have increased 900% year-over-year due to the increase in people working and learning from home.  In addition, Apple announced on April 30 that its quarterly earnings miraculously increased by 1% from last year.

In summary, we are finding that it is hard to predict anything these days.  Will there be a massive electronic component shortage due to increased demand from key industries, such as 5G, and IoT, while component manufacturers struggle to keep production up, attempting to maintain safety for their staff?  Or will lack of demand for electronic products due to a recession create a glut of components?  Only time will tell, but don’t just wait around and see.  Although a lot of extra work is required, one has to prepare for all scenarios in these unprecedented times.  It would be prudent to order components now to secure your production schedule, whatever it might be.

To lock in your electronic components to avoid production slowdowns, please contact one of our Search Experts by email; USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com.

AERI Helping the Fight Against COVID 19. 

At AERI we have found great purpose and a sense of satisfaction helping those on the front lines of this battle. We are supporting multiple manufacturers of equipment being used to fight against the deadly COVID 19 coronavirus.   Most importantly test equipment and respirators.  Testing for the virus will be the world’s way forward to stop the rampant spread of the disease.  We have already seen how effective testing has been in South Korea (see article).  And respirators will help those who fall most ill, stay alive.   It is our hope that the team at AERI makes a real difference in this crucial fight for life.

Whether your product is saving lives or powering your nation, please contact one of our Search Experts by email USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com

How the Coronavirus Epidemic is Affecting the Electronic Component Supply Chain

The Coronavirus has affected more than just the thousands of unfortunate people that have contracted the illness.  We and the rest of the world are watching the news with great sadness for those affected.  Being one of the largest exporters of goods in the world, this outbreak in China will also send ripple effects throughout supply chains globally.  The largest electronics manufacturers are all building in China, which is why half the world’s component inventory is basically quarantined.  Suppliers in China are all telling us that they are closed through at least February 17th, but even that is just a guess at this point.  

Some of the companies which have China facilities which been shut down are;

  • Advanced Semiconductor
  • Amphenol
  • Diodes Inc.
  • Molex
  • Kemet
  • Panasonic
  • Renesas
  • Samsung Electronics
  • TDK
  • Yageo
  • AOC
  • Flex
  • Jabil
  • Asteel-Flash 

There are small pools of electronic components in other parts of the world, but don’t be the last one to go fishing for them.  AERI has access to all of the world’s remaining inventory, whether it is in the Original Component Manufacturer’s warehouse or in excess inventory at an OEM that doesn’t need them at the moment.  Reach out to your dedicated Search Expert at AERI or click the link to send us your list of parts you are concerned about.  

Contact our team to learn more and plan your supply solutions.

 

As we look at the recent history of similar disruptions, in November 2002, Severe Acute Respiratory Syndrome (SARS) started spreading around from the world’s electronics manufacturing center, southern China. The virus infected 8,098 people causing 774 deaths worldwide. Without minimizing the personal, human toll of this event, it is important to understand the business and economic impact. SARS costs companies an estimated $40B and reduced GDP in Asia by an estimated .4% in 2003.

Less than a month ago, this new virus, also likely passed from animals to humans, began showing up in the central China city of Wuhan. This virus is much more widespread, the novel Wuhan Coronavirus has more than 40,000 people around the world – most of them in China.

See this informative and functional map of Coronavirus locations and statistics


https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6

Time will only tell how this virus will affect the electronic component supply chain, but for now, join us in prayer and thought for the thousands whose health have been affected by this terrible situation. 

Will 5G Cause Another Shortage and When?

Unfortunately, another electronic component shortage is looming due to the amazing technology and speed of the 5G network.  One of the biggest questions is; when will it take effect?  5G is set to create another revolution in electronics, but how quickly will it take hold?  The big wireless networks have all begun their initial rollouts to a small group of most metropolitan cities. The plan for the largest players, such as AT&T, Verizon, and T-Mobile, is to cover the US by the end of 2020.  This will be a boon to mobile phone sales initially, but on their heels will be a number of new applications, some that we cannot even imagine at this point.  We will see enhancements to autonomous vehicles, a host of new IoT products, hologram applications to take connecting people across long distances to a whole new level, and virtual reality becoming mainstream. 

These massive changes to the electronics segment beg the next question; how big of an effect will it have on the electronic components industry?  It is estimated that to create just the infrastructure to lay the foundation of the market, which will be happening on a large scale in 2020, will consume $10’s of billions of electronic components.  The overall market segment is expected to reach a valuation of $700 billion by the end of 2025.  The growth rate of the overall 5G industry is estimated to be between 70%-100% per year for the next 5 years.  That is a huge spike in the demand of electronic components.

All signs point to another period of increasing lead times for electronic components.  One of the best protection against your production line coming to a halt, due to one hard to find or counterfeit electronic component, is to have a great independent distributor partner in your back pocket.  AERI’s global reach and quality certifications, such as the AS6081 (Counterfeit Detection Standard) qualify us to support the most discerning manufacturers.  Contact one of our Search Experts by email; USA calisales@aeri.com, Asia ausales@aeri.com, or Europe uksales@aeri.com to schedule a meeting to discuss your needs and requirements.