For months, there have been reports of chip shortages in the automotive industry, but other sectors, including many of our clients, are also affected.
Regarding the supply of ICs, a relaxation of the situation is not anticipated until 2023. Production capacities cannot be expanded in the short term, and many companies have now placed long-term orders, which further exacerbates the supply shortage.
The scarcity now affects not only ICs but electronic components in general, and increasingly also the raw materials essential for production. The reasons for this scarcity are diverse, ranging from increased demand following the pandemic's decline and persistent labor shortages in raw material-supplying countries (as personnel have not yet returned to work post-pandemic), to electricity deficits and transport capacity limitations in China.
The surging demand for raw materials has also led to an explosion in coal prices, a commodity China's power plants still critically depend on. Due to fixed energy prices and the expensive import of coal, particularly from Australia, power plants are no longer economically viable. Operators are consequently curtailing production, leading to power outages.
Freight capacities from China remain restricted due to the stringent zero-COVID strategy. Seaports and airports are regularly subjected to lockdowns following isolated COVID-19 cases. Furthermore, some airports operate under a 7/7/7 principle for safety (7 days work, 7 days hotel quarantine, 7 days home quarantine), resulting in reduced personnel availability. Sea freight prices are now approaching air freight costs due to container shortages. Even the previously considered "insider tip" of rail transport is fully booked long-term. The situation is further exacerbated by the upcoming peak season. Annually, transport prices surge significantly before Christmas and the production hiatus during the Chinese New Year.
Given the outlined situation, significantly longer delivery times of 20+ weeks and price increases of 15-20% (and in some cases considerably more) must currently be anticipated. Short-term deliveries are generally only feasible through component purchases on the spot market and business-class transport rates. Therefore, we urge you to place your orders well in advance.
