Supply chain challenges in the embedded systems industry
At the embedded world Exhibition&Conference 2023 a panel of experts at the exhibitor forum discussed questions on “Supply Chain Challenges” in a fast-changing political and economic environment.
What should the embedded systems industry learn from the supply chain challenges?
Supply chains in the embedded systems industry are still strained, for multiple reasons. While the impact of the pandemic is waning, geopolitical tensions have become the dominant factor. To reduce the dependence on imports of advanced ICs, the US, Japan and Europe are striving to encourage domestic IC manufacturers, as well as trying to attract leading overseas semiconductor companies to invest in building new fabs locally.
However, it is obvious that even if the regions succeed in reducing the dependence on front end manufacturing, crucial parts of the supply chain will still be located in the Asia-Pacific region, particularly in China. Thus, many western companies need to cope with the US export restrictions to China. Firstly, they must figure out how much of their China business they could secure despite the restrictions; secondly, they need to find ways to maintain access to components manufactured in mature and trailing edge technologies in China, which China could offer for attractive prices – and which will be difficult to source outside China.
What does this mean in relation to building up reliable and resilient supply chains, for semiconductor manufacturers and distributors as well as their customers, such as EMS and embedded systems manufacturers?
Georg Steinberger, Industry Consultant, David Stein, VP Global Supplier Management, Digi-Key, Frank Wolinski, VP Head of EMEA Channel Sales, STMicroelectronics and Marco Mezger, VP and COO of Neumonda and President of Neumonda/Memphis, discussed these issues together with their host Heinz Arnold, Markt&Technik, Senior Editor, at the exhibitor forum of embedded world 2023.
Their unanimous conclusion: Lesson learned. If you want to have more control, you have to own part of the supply chain and pay a fair price for what is happening there. The last years have been a wake-up call. Just-in-time is not working any more. The manufacturers are jointly responsible and should not outsource all the risks to the distributors.
Watch the whole panel discussion on supply chain challenges