Since early 2020, there has been an acute shortage of electronic components such as semiconductors and chips. This shortage occurred during the global pandemic, as everyone worked from home. The sudden surge in the purchase of electronic appliances such as computers, laptops and smartphones resulted in the high demand and comparatively low supply. Eventually, this also started showing effects on PCB production. The severity of this shortcoming has been immense on an international industrial level for the past three years. Though there were some instances in 2023 where the problem seemed to be under control, it never ceased to exist.
In this blog, let’s explore various mitigating approaches to reduce the negative effects of chip shortage on PCB production. Recognizing the underlying reasons and taking proactive steps can assist printed circuit board manufacturers in overcoming these difficulties. This is critical as the situation remains severe and shows no signs of abating as we head into the second quarter of 2024.
The electronic industry is heavily dependent on the mass production of certain high-density components like FPGAs, CPUs and MCUs. Production of these components has been impacted by the global chip shortage, which has been a problem stemming from an imbalance between supply and demand that any particular electronic circuit design company couldn’t irradicate. The issue is primarily driven by certain aspects such as:
This shortcoming has been surfacing at such a high pace due to a complex interplay of factors including a rise in the demand for electronic devices and disruptions in the semiconductor supply chain. Notable contributors include challenges in the automotive sector, a surge in consumer electronics use and logistical issues intensified by the recent pandemic. The global shortage of electronic components has significantly affected various areas of electronic manufacturing, including PCBs. Engineers, for example, must reassess their design processes for electronic circuits. They must consider from the outset that sourcing certain components might be challenging, and some components could have extremely long lead times so that the printed circuit board manufacturers.
With its beginning in 2020, the chip shortage led to the closing down or temporary halt of operations for famous wafer, semiconductor and electronic circuit design company or production facility for precautionary reasons. Leading to a significant drop in the demand for raw materials such as copper, which are essential for producing electronic components and PCBs. As the electronics sector began to recover from the primary pandemic shock, it experienced a robust V-shaped rebound. This led to a surge in global demand for semiconductors, further resulting in higher procurement costs and extended delivery periods.
The need for new electronic equipment has increased as a result of the industry’s shift to smart working. These gadgets are necessary for people’s professional or academic necessity at home. With the increase in the number of gadgets produced, the components are thus increasing tremendously pushing several printed circuit board manufacturers to push their manufacturing procedure into overdrive. This resulted in the expanded output by the electronic sector to meet the demand for gadgets like:
The initial link in the supply chain, wafer foundries, was the first to feel the effects of the pandemic which slowly spread across other printed circuit board manufacturers. There were very few foundries operating at the time, with the majority of them being located in Asia.
Because of their inability to handle the volume of orders they received, several sizable silicon foundries which account for a significant portion of global wafer production were likewise unable to guarantee quick delivery periods, at least not for the foreseeable future. Other materials like PCB substrates, copper sheets, FR-4, connections, cable and passive components also saw a notable decrease in supply. The requirement for more parts and batteries for electric vehicles, along with an increase in PCB fabrication, contributed to the rise in demand for copper sheets by several printed circuit board manufacturers.
The succeeding escalation of the war between Russia and Ukraine has led to a notable rise in pricing. As a result, there are now fewer raw materials available to produce semiconductors.
To be prepared with decisive actions for navigating through such a troublesome period in the electronic sector cannot be expected from anyone. To manage such a shortcoming effectively, wafer foundries and printed circuit board manufacturers should consider the following actions:
Supplier Collaboration & Diversification – Maintain close relationships with electronic component and raw materials suppliers to stay informed about technology roadmaps and investment plans, ensuring timely availability of necessary materials. Source from multiple reliable sources which can further aid in mitigating the risks associated with relying on a single source, providing flexibility if one supplier faces issues.
Advance Production Planning – Place orders well in advance, which can help suppliers as well as the printed circuit board manufacturer companies manage production more flexibly and reduce delays.
Stocking Crucial Components – Accumulation of essential components, such as Bluetooth or WiFi transceivers, rare integrated circuits and parts of displays along with IoT devices, to tackle future shortages.
Relying on Official Distributors – Choosing the authorised distributor is always the smart option to avoid the risks associated with third-party suppliers, such as unreliable or counterfeit components.
The conflict between Russia and Ukraine that superseded the COVID-19 outbreak had a combined detrimental effect on the worldwide supply chain of electrical components and materials. Lack of components and raw materials can have a big influence on printed circuit board design and assembly if it’s not planned for. It is possible to decrease the impact of unforeseen design needs with careful supplier optimization and component selection planning.
As a reputed printed circuit board manufacturer, we at CircuitWala have had our fair share of ups and downs during the aforementioned phase but we stayed true to our concept by providing an inexpensive yet convenient PCB shopping experience. Be it a prototype order or a bulk consignment, order with CircuitWala today – the quickest turnaround time and plenty of custom options!
