The number of commodity dimensions with red status grew again as the industry entered the fourth quarter of 2021, according to the latest Supplyframe Commodity IQ, a unique combination of analytics and analysis that offers predictive and prescriptive intelligence for the electronics industry related to raw materials like resins and metals and components like diodes and DRAM, assembly and testing bottlenecks, component production, constrained logistics, and expanded lead times. The new Commodity IQ report shows that lead time dimensions in red have risen 55% quarter-over-quarter after doubling in the third quarter, and it forecasts that 66% of all pricing dimensions are poised to increase. This is occurring as the industry grapples with Delta variant disruptions, expanding Chinese electricity consumption restrictions, massive end-of-life announcements for programmable logic and other devices, and prices rising by as much as 100%.
“Earlier outlooks suggested possible semiconductor and electronics components industry stabilization by mid-2022. But the new Commodity IQ report shows that stabilization is now unlikely to begin until the first half of 2023,” said Steve Flagg, CEO and founder of Supplyframe.
Companies in the electronics and related industries have spent decades leveraging outsourcing and fine-tuning just-in-time (JIT) inventory strategies. But today’s highly uncertain business world calls for organizations to adopt more proactive, adaptive supply chain management.
Supplyframe Commodity IQ provides businesses with insight and foresight to help them better navigate the increasingly complex supply chain environment. It connects the dots to expose the interdependencies between multiple sectors and their end markets. Cross-sector insights are important since many sectors rely on the same electronic components to build products.
Delivered in a continuously updated online environment that includes critical alerts across commodities, Supplyframe Commodity IQ is offered via an annual subscription that provides:
- Rolling quarterly forecasts for the crucial sourcing dimensions of market dynamics, pricing, and lead times
- Numerical, supplier, industry, and overall context with insightful supporting commentary
- Design and demand trends, including engineering design cycle patterns and predictions as well as sourcing signals by commodity and sub-commodity
No other intelligence service employs both engineering and sourcing signals – based on billions of intent, demand, and risk parameters via the Supplyframe Design-to-Source Intelligence (DSI) network – to offer a framework for tactical and strategic decision-making. Supplyframe Commodity IQ is underpinned by commodity sourcing subject matter experts at more than 350 DSI Network Partners managing over $120 billion of direct material spending and by powerful analytics generated by more than 10 million sourcing professionals and electronics engineers.
“The old-school methods of dealing with disruption are no longer good enough,” said Flagg. “To become more resilient and profitable, manufacturers that rely on electronics components need better insights to make the most informed decisions. They can do that with Commodity IQ.”