Companies are improvising as they go. It is more frequent to see how companies have delays in production, increased costs, and loss of income and customers. Despite this, the demand for electronic products is growing, but effective and reliable solutions are needed.

Sectors such as telecommunications, computing, and automotive are the most affected by this crisis. This publication will delve into the factors that have triggered this situation. In addition, we will propose what actions you can take to mitigate the impact of component shortages in 2023.

What is expected regarding the shortage of electronic components in the year 2023?

The Covid-19 pandemic contributed to the development of this crisis. The suppliers of electronic components need help to satisfy the existing demand. The increased demand for electronic equipment exerts constant pressure on the supply chain. In addition, the availability of parts is less and less.

Low production capacity is another critical element that contributes to shortages. The electronic component manufacturer needs capital, technology, and infrastructure to guarantee the quality of the product.

Many industries have been hit with component shortages. However, they have several key factors that prevent them from meeting customer requirements:

Production delays

Delivery times have been seriously affected by the low availability of electrical components. It limits companies’ response capacity to meet their customers’ needs.

Cost increase

The law of supply and demand establishes market prices. As there is little availability, the cost of the component is increasing. This factor impacts the profit margins of companies.

Lost revenue and customers

Companies lose customer credibility and reputation when they cannot fulfill orders. It generates dissatisfaction in the client and, in some cases, the termination of commercial relations with the company.

Counterfeit Components

The black market has fueled the shortage of counterfeit electronic components. Using counterfeit semiconductors is a hazard because they risk the product’s quality and safety.

Purchasing counterfeit components is a severe drawback. The Semiconductor Industry Association (SIA) estimates that the semiconductor industry loses $7.5 million annually due to counterfeit parts.

How companies can anticipate and prepare for the shortage of electronic components in the year 2023

The lack of parts during the pandemic, such as silicon wafers, is high. For this reason, we consider it essential that companies adopt a strategic vision to reduce the impact of component shortages. Faced with this situation, we present some actions that you can replicate in your company:

Strengthen business relationships with suppliers of electronic components

This measure prioritizes and guarantees the dispatch of your company’s raw material over others. Business relationships will help you ensure components’ availability when needed.

Depending on one provider

Supplier diversification minimizes supply chain disruptions. In this way, waiting times for a dispatch are reduced, and the continuity of production is guaranteed.

Get a stock of the most critical components

Knowing the impact of the shortage of electrical components, it would be favorable to have a stock of essential elements for production. It will allow you to make adequate estimates to balance inventory and the company’s needs.

Counterfeit monitoring and detection

Companies must have technology and processes capable of verifying the authenticity of electronic components. In the same way, you can have the support of other companies that guarantee the veracity of these pieces.

Set project priorities

The current situation has forced companies to prepare for adaptation to the shortage of components. According to the initial phases of your project, focus on what you need. Certain companies have yet to be aware of this situation, and the components they had in stock became obsolete.

It is essential to have quality raw materials and electronic components. Out of desperation, many companies turn to unreliable providers. Here is the importance of having a component marketer that offers all the guarantees for the continuity of production.

Marketing services

Marketing services apply strategies to identify solutions to a problem. The impact of the shortage of components has contributed to many companies hiring the services of a marketer. These companies can help perform the following functions:

• Regular shipments in a short period
• Obtention of scarce electronic components
• Safeguard a stable supply of electrical components
• Increasing the possibility of accessing international trade in electronic components
• Adaptation of your marketing strategy to the needs of today’s world

One of the most promising markets is the manufacturing of electric cars in Mexico. A marketing service company will guarantee you high-quality electronic components. For example, I am getting high-performance lithium batteries. It, in turn, ensures product quality and reduces manufacturing costs.

Other approaches to mitigate the impact of the shortage of electronic components

We have seen ways to reduce the absence of electronic semiconductors. However, if we want to be more efficient, it is necessary to create solutions focused on innovation and shortage of components. In this sense, it is required to evaluate certain aspects:

• Automation can be the starting point to take advantage of resources and reduce the waste of electronic components
• Identify which aspects limit the production process to use the components in the correct way
• Acquire components that best suit your production process.
• Work with suppliers to get viable component options.

According to estimates by the Gartner Consulting firm, global semiconductor revenues will decrease by 3.6% in 2023. However, something indicates that the shortage of semiconductors and chips will continue. If you know the trend in your industry, it will be easier to make decisions and maximize your financial resources.

How to mitigate the shortage of electronic components

The need for more electronic components will continue to challenge the industrial sector. However, the right approach will allow for finding opportunities amid the crisis to mitigate risks. These actions will help companies not stop their production and continue advancing in a competitive environment.

At AMN, we care so that our clients are never deprived of raw materials. Our business alliances have supplied the Mexican electronics industry with proven quality components.

Avoid the risk of counterfeits and give your customers the confidence they need. Do you require more information about the component marketing service? Contact us to solve all your doubts.

Electronic technology has become essential due to the increasing use of circuits. Every piece of equipment, computer, or machine has a system based on them. For this reason, in countries like Mexico, where the electronics industry represents a sector of essential opportunities, great interest, and an optimistic vision has been generated. 

Mexico’s electronics industry has gained a significant global role. 

The role of the Mexican electronics industry has become evident around the world. After all, Mexico is well positioned in the rankings for the electronics industry, and this reflects how changes have taken place concerning the objectives of the Mexican company. 

Initially, Mexico focused its production on its domestic market; however, the Latin American country has become a significant assembler and exporter. Proof of this is the almost 60,902 million dollars registered in exports, according to data from the Department of Commerce.

Mexico’s electronics manufacturing industry could position the country as a global hub for this market. Companies from other countries have already shown interest in using Mexican production plants. 

Challenges and opportunities for Mexico’s electronics industry

cIt is clear that electronic manufacturing services in Mexico will have a challenging road to consolidation. They are currently facing challenges, among which we can highlight the following: 

Establishment of global networks in association with leading companies in the electricity sector. The aim is for companies to collaborate through competition, allowing us to create significant advantages in the Mexican electronics supply chain. 

Shortening cycles in Mexico’s electrical equipment manufacturing industry. This is one of the trends that has gained the most important among companies. After all, it makes it possible to respond to customer needs. 

They are taking center stage in the face of the diminished participation of other countries. Mexico can gain the ground that countries like Japan and the United States have ceded. After all, the latter preferred moving their production plants to third countries. 

Of course, we must not only talk about the challenges facing the electronics technology industry in Mexico. There are many opportunities to highlight, among which we mention the following: 

• High demand for electronic components from other countries. 
• Massive variety of areas within electronics that are growing and represent market opportunities. We highlight the automotive, medical, aerospace, computer, and industrial sectors. 
• Specific industries, such as automotive, have followed the electronics industry trend. This represents new opportunities to take advantage of. 
• Mexico can train highly qualified labor. This means that companies will always have the proper personnel. 
• The Mexican government has been seen as a guarantor of technological development in the country. This can be seen in the legal instruments that support the activity of the Mexican technology industry.

Thanks to the opportunities available to the electronic technology industry in Mexico, growth can be exponential. That is why the outlook is identified as positive to see the Mexican nation as an exporting hub. 

What public policies are in place for the Mexican electronics industry? 

One thing we can highlight about the Mexican electronics industry is its excellent legal framework. We highlight instruments such as:

• Drawback: This allows exporters to reduce taxes on their products. It is a refund based on the amount paid. 
• PROSEC: represents the possibility for manufacturers to import with preferential tariffs.
• IMMEX: which benefits companies when importing machinery or technology. It is a means that simplifies the procedures that must be complied with for the such purpose. 

The Mexican government seeks to encourage electronic manufacturing companies in Mexico with these instruments. After all, it grants enormous facilities so that they can continue to grow in the market. 

There are enormous possibilities for the Mexican technology industry. 

While it is true that there are many challenges to overcome, the Mexican electronics industry can continue to grow. Some of the major powers have chosen to leave gaps that Mexico’s manufacturing sector can fill. 

Technology continues to advance, and to be competitive requires an ideal scenario. Given Mexico’s political and economic condition, the stage is set for even more significant growth.