2022 predictions and trends in the electronics industry

As we move into 2022, many electronic components analysts expect the market to continue experiencing significant discrepancies between demand and supply. Reflecting back to trends highlighted by OEMSecrets analysis for Q3 of 2021, experts including Intel and top semiconductor executives agree that supply chain challenges are set to remain at least until 2023.

With the growing need for stable supply chain networks, OEMSecrets has predicted some key areas that will be crucial for OEMs, CM, EMS and engineering firms in 2022 following insights from industry data analysed over the past year.

1. Digitalisation of procurement

Digitisation has changed customers’ buying behaviours and that has meant that consumers demand a rapid time to market for products and services, even for increasingly complex electronic components technologies.  An important part of the supply chain, procurement is bound to evolve from the tedious use of manual systems and spreadsheets to embracing digital tools. This is a great opportunity to answer the evolving needs of the market especially for inventory management and the accuracy of forecasting for OEMs, which is why digitalisation of the procurement function will contribute significantly to supply chain resilience.

2. Increased use of the online marketplace

The fierce competition and the lack of supplies directly from distributors have led buyers to turn to independent online marketplaces. OEMSecrets.com, an online marketplace has seen increased usage of its platform, especially the bill of materials tool which is used for searches of parts with low stock.

This offers customers transparency on inventory and price insights. Parts and components data must be continuously updated and always available to ensure that buyers and management act on current information. Real-time sources, using API feeds to complete their own dataset, provide them with stronger insights and optimised purchasing decisions.

3. Automotive and datacentre components to be more expensive

Not only have automotive OEMs and EMS had trouble over the past year restocking their factories for continuous production, but analytical data from forecasting tools indicates that up to 20% price hikes for parts like MCU and power management ICs (PMICs) are expected in Q1 2022. The expected price increase on chips can be attributed to increased costs on raw materials as chipmakers struggle to obtain precious materials like silicon wafers, copper, and gold.

Working from home directives across the world calls for more data centres to be set up and therefore, demand for more MOSFETs, power management units and Wi-Fi components will increase to scale the production of equipment to facilitate smooth connectivity to the online workforce.

Automotive demand was seriously affected in 2020/21, with scheduled orders being cancelled and as a result, production even stopped. The recovery push in the automotive sector has substantially exceeded supply and the truth is there are just not enough chips for all verticals, which adds to price volatility.

Sam Cowley, Founder of OEMSecrets, notes there is a major shift of focus to automation. “The majority of the manual spreadsheet activity we still see has the potential to be automated, which is why we work with OEMs proactively to customise their tools through access to our API data and BoM tools to help make those crucial purchasing decisions, especially during times when the shortage of parts and price uncertainty are unavoidable”.

“As a result, we recommend OEMs and EMS providers work with us as a proven electronic parts marketplace to purchase parts indirectly from the vetted and authorised suppliers listed.”