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Supply Chain Update and the Impact of 5G
December 4, 2019 | Nolan Johnson, I-Connect007Estimated reading time: 2 minutes
![](https://iconnect007.com/application/files/2816/3130/6360/StephanieMartin_SMTMagJan2019.jpg)
I caught up with Stephanie Martin, senior VP of global supply at Vexos, to talk about the current landscape of the industry from an EMS perspective. Stephanie describes an ongoing technology shift occurring with the industry’s move to smaller case sizes and why it’s in the customer’s best interest to look at the design cycle and go as small as they can on components.
Nolan Johnson: Stephanie, you were so helpful earlier this year when we discussed parts shortages; you gave some great global insight. What has changed in the industry?
Stephanie Martin: This year has had significant changes. Last year through December of 2018, we were in the supercycle with shortages and extremely long lead times. MLCCs were out for 52 weeks, and several suppliers did not even accept orders. They were in that tight of supply, so everything was fully allocated, and we had that across a number of components. Lead times extended, and prices rose; it was a pretty bad situation. I’ve been in electronics for over 20 years, and it was the worst situation from a buying perspective I have ever seen.
Starting in January of 2019, things started to ease up. We first caught wind of some easing up in Asia in late Q4 and early Q1 this year. The distributors in Asia told me their business was down 8% in Q4, and then an additional 10% in Q1 of this year. In their opinion, this was primarily driven by a reduction in the automotive industry in Chinese manufacturing and a reduction in the number of cellphones being built. As a result, that eased up a lot of material. By the end of Q1 of this year, we saw available supply in most commodities. Prices have been dropping and stabilizing. Lead times are down to what we would consider being near normal, which is somewhere in the 10–12-week range for most components as opposed to 30+ weeks last year.
However, some spotty problems can still happen. We’re still struggling with MOSFETs, which are still in the 30+ week range. I don’t see any real change in that happening yet, but most of the other components—particularly the MLCCs and smaller sizes, such as 0201s and some 0402s—are down to reasonable lead times. The larger case sizes for the MLCCs are still constrained, of which the sizes 0603, 0805, and 1206 are the most common; those still have longer lead times with 25 weeks or more, and we do not expect to see them improve at all.
To read this entire interview, which appeared in the November 2019 issue of SMT007 Magazine, click here.
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