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Home Editor's Pick Tech Blog

Chip Shortage Drags On and So Does the Fallout

Editorial by Editorial
August 18, 2022
in Tech Blog
Reading Time: 2 mins read
Chip shortage ripple effect
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Original Equipment Manufacturers (OEMs) are still struggling to get parts.

That’s the key finding of Avnet’s recent Pulse Survey, conducted in July 2022. Despite the reported uptick in production capacity at some chip makers, 99% of the 100 engineers surveyed said that access to parts continues to be a challenge for them.

The Pulse Survey is a follow-up to our more extensive research study, Deconstructing the Chip Shortage, conducted in late 2021, which explored how the shortage was impacting product design. The goal of this recent survey was to find out the degree to which the situation has changed over the past six months.

The answer? Not markedly.

The latest results show the shortage is continuing to have a ripple effect on OEMs ranging from longer lead times (76%) to the lengthening of overall product design cycles (52%) in the past six months. A majority (82%) said their business has had to modify performance and functionality of their products.

Some 86% of respondents said that they are paying more for parts, reflecting the wave of price increases that some supplier manufacturers have issued in recent months in response to the continued price volatility related to raw materials, labor, energy, and wafers from foundries.

One positive indicator from the survey data is a slight improvement in manufacturing delays for some, with 7% of respondents reporting production schedules are now being met. That’s in contrast to the 2021 survey, when 100% of respondents reported at least some delay. For others (79%), on the other hand, production delays continue to increase.

Avnet shared a bit of good news this month, reporting that lead times are beginning to stabilize for many parts. However, there are a few technologies that are still highly constrained., Avnet’s materials team reported that 65% of lead times are the same or slightly better than last quarter, averaging a 10-day improvement. Avnet also reported being able to get record output during the first half of 2022.

While exactly when the market will turn is still unknown, there are signs that some engineers are optimistic that part constraints will begin easing up. Asked whether the chip shortage was more of a concern than market conditions today, 46% said yes. When asked how they would feel six months from now, that percentage dropped to 30%.

Tags: AvnetChip Shortage
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