04.02.2021 | Latest

Market development in the electronics industry

Market development in the electronics industry

The current situation on the base materials market

The base materials market in Asia has been subject to enormous changes in recent weeks. Manufacturers of printed circuit boards, for example, are seeing massive price increases. The main reason is not so much the Corona pandemic and the resulting disruption of supply chains, but rather the shortage of raw materials due to the increased global demand for gold and copper, for example.


In addition to the pandemic, one of the top issues in 2020 was climate protection, which is now having a massive impact on the availability of raw materials, especially copper: a normal passenger car requires around 25kg of copper for production (cable harnesses). An electric vehicle already requires 80kg of copper. The planned increases in e-mobility mean that the planned copper requirement will increase tenfold by 2030.

This has led to a price increase of 69% at the end of the year, the highest level since 2013. The electronics and battery technology industries for e-cars are competing for copper foils, and production volumes are at capacity.

Prices for glass cloth, a backing material for laminates in printed circuit boards, have also risen 20%. Two resin manufacturers in China and Korea, major suppliers of glass fabric and copper foils, experienced complete outages in November due to explosions and fires. Glass fabric will not be available again for a few months at the earliest. Due to the upcoming Chinese New Year at the end of February, increases have already been announced, but prices will probably continue to rise throughout the first quarter of 2021. Globally, panic buying is already occurring, in line with the motto "the main thing is to be able to deliver." Factors such as logistics, with steadily decreasing freight space (increased online trade, U.S. trade war with China, changed freight routes due to Corona,...), further complicate the availability situation and lead to further price increases.

 

Comparable developments can also be perceived in the semiconductor sector. Sudden shortages in the form of missed, promised deliveries and massive price increases challenge electronics manufacturers on a daily basis. Delivery times of 30, 40 or 50 weeks are no longer uncommon. The purchasing department at Ginzinger electronic systems is therefore in permanent escalation mode and does everything possible to cope with the extreme difficulties.


Up to now, Ginzinger has been able to guarantee production and delivery capability through replacement purchases, some of which have been considerably more expensive. In order to continue to achieve this, inventories are being massively increased. In addition, based on the order backlog, long-term plans are already being made into 2022. The earlier and more far-reaching customers order their requirements, the better the opportunities for securing purchased parts in good time. This is because further delivery time extensions in other article groups are also to be expected.

As a manufacturer of electronics, Ginzinger electronic systems observes the situation in the Far East very closely, but has hardly any alternative options or influence on it. Contrary to previous efforts, the company therefore feels compelled to pass on these price adjustments, at least in part. For this purpose, the Ginzinger customer advisors will personally approach the customers in the next few days and discuss the price and delivery time situation for their products in a joint meeting and look for solutions together.

Maintaining the competitiveness and delivery capability of the customers is always in the foreground for Ginzinger electronic systems.

Translated with www.DeepL.com/Translator (free version)

Contact

Do you have questions

or want to get in touch?