End of year reflections from Solsta

How would you sum up the past year?

From a business point of view, 2023 has been a lot like March in the UK. It came in like a Lion and went out like a Lamb.

What do I mean by that? We started the year under the constraints of product shortages and allocation which led to many customers not getting the product they wanted and needed when they wanted and needed it. This led to challenging conversations around what product they would be able to get and then having to source product from the grey market to satisfy the build requirements that they had.

Customers were still placing 18-24-month orders to secure product for future builds. Then, as we went through the year, many products started to return to a more sensible lead-time.  Not necessarily back to 6-8 weeks’ timeframe, but more manageable for customers.

That said, there was, and still is, a large amount of production constraint on older process nodes. The newer, and as such smaller, process nodes have begun to normalise towards the end of 2023. As we entered August and September, we found that the increased inventory within the supply chain forced many customers to request push outs of their inbound stock. As a result, bookings slowed down considerably over the Summer and Autumn months.

Many say that this is merely a ‘normalising’ of the market, and that we should see a return to regular supply and demand conditions through 2024.

What was your highlight as a business in 2023?

Without a doubt, the single biggest event in our business in 2023 was the re-branding process and subsequent release to the market. When we released the re-branding message to the world in early October, we did so with a great deal of energy, expectation, and excitement.

There was also some trepidation given most of the team had not been through a re-branding process before. However, the feedback has been positive with the new name of Solsta being well received.

It has given us new impetus to take the company forward in a way that will help us to build upon the successes of the past, but through a new contemporary name and logo. The work on continuing to push the name out, articulating the benefits to both our customers and the wider electronics distribution industry will certainly continue into next year.

What was the best news for the electronics sector in 2023?

The biggest news for the electronics sector this year was the gradual, and continual reduction of lead time and the availability of product. 2022 and the first part of 2023 was very much focused on companies trying to secure the product they needed for product builds. Through 2023 we saw lead times reduce, stock becoming more available and the market more generally slowing down.

With product being made more available within more regular lead times, companies are better able to forecast their build schedules. This means that they are better placed to satisfy their own customers who are still in need of products.

There are still a few challenges particularly around older and larger geometries, but in general lead times are back towards a more manageable level for most companies.

How would you say the electronics sector is positioned for 2024?

With the large majority of semiconductors now showing a more regular lead time, and with the amount of inventory within the supply chain, the global market for electronics should be well placed through 2024.

Well-funded markets such as EV, Green Energy and Military will continue to grow. As stock is consumed, companies will again look at the component lead times and begin to place order coverage throughout 2024. This should provide growth opportunities for companies who are already well positioned within those markets and are delivering value to their customers.

What are your key priorities for 2024?

Key business priorities for 2024 will be to continue momentum as part of our growth trajectory, to increase our own brand products, to further internationalise the business and to continue investing in our people – both current and new talent.

We are incredibly fortunate to be organised in a way that facilitates growth through new designs and innovation. Continuing to work closely with our customer base will allow us to better guide them through the technology to help them turn their ideas into plans and their plans into products. We will continue to execute on the re-branding to bring the name of Solsta into more and more of our customers worlds. We also plan to increase our geographical offering by addressing current or new markets with new and innovative products. All of this will lead to further growth within our business.

If you could be granted one wish for 2024, what would it be?

While I feel that wishing upon stars is largely a fruitless exercise, there are certainly some trends and opportunities that I am hopeful will realise themselves through 2024.

The opportunity around the sun-setting of the 3G network is certainly something that we at Solsta are very well placed to help customers with. The decision to move away from 3G, to either a 4G or 5G solution, can be a very complex one, and customers will require strong, clear, and concise advice around the best direction to take. Along with the increasing number of customers moving towards SOM (System on Module) solutions to significantly reduce the time to market of their products, these are both golden opportunities with the potential to increase our business levels through 2024.

Having a broad range of SOMs and exceptional knowledge of the SOM market means we can provide customers with a high level of confidence to better define and execute their plans into products.