“The UK market is no exception, which is of course good news for distributors. The bad news is that, with key components such as MLCCs still in high demand, distributors in the UK and elsewhere are likely to continue facing major challenges, especially shortages.”
According to Hardern, rising demand from the automotive industry, ever-evolving smartphones and the Internet of Things are some of the leading causes of the current shortages in components. And, with the rollout of 5G and the need for compatible end devices and new network infrastructure, the situation is likely to get worse.
“One reason for this is the high demand for components in Asia, which is affecting supply in significantly smaller markets such as Europe,” Hardern said.
“To address this, all the major manufacturers of components are already expanding their production capacities, but this strategy is unlikely to have an immediate effect on the wider electronics supply chain. That is why advanced planning and stock management optimisation remain so critical when it comes to distribution.”
Another inescapable challenge for UK distributors looms ahead: Brexit.
“Depending on how the UK’s withdrawal from the EU eventually pans out, key markets for the electronics industry are at risk of being hit hard. With thousands of jobs already being lost across the automotive supply chain combined with shrinking sales and production, it is easy to understand why some UK electronics distributors are starting to feel concerned. Luckily, recent research has shown Brexit presents the automotive industry with opportunities as well.
“The falling value of the pound, for example, may encourage some UK car manufacturers to reshore production. This may act as an important economic stimulus that could ultimately benefit suppliers of electronic components. We’re also seeing a shift towards electrification and connected and autonomous (driver-less) cars.”
This year, for example, Jaguar Land Rover invested £1bn in the development of electric vehicles while the new electric Mini is now set to be manufactured in the UK, along with other electric cars.
“Growing investment in e-mobility may offset some of the negative consequences of Brexit, offering the electronics industry new opportunities for growth,” Hardern suggested.
“One area that is looking particularly promising for distributors of electronic components is the automotive industry’s ongoing migration from low-cost brushed DC motors to the more efficient brushless DC motors (BLDCs). BLDCs are smaller, lighter and offer a better power-to-weight ratio, with a wider dynamic response and improved torque. As such, they are key to reducing the total cost of ownership. BLDCs requires more complex drive solutions than brushless DC motors so electronic components including power management, gate drivers, MOSFETs, IGBTs and Hall effect sensors are becoming more critical than ever.
“Battery management is another key target many electronics distributors have set their eyes on. Lithium (Li) ion batteries, widely used in electric and hybrid vehicles, offer considerably higher energy density and voltage, with smaller dimensions, more charge cycles and a longer service life. This is where electronic solutions such as Battery Management Systems (BMSs) come in. A BMS guarantees the functional safety of the battery, prevents lasting damage and ensures optimum utilisation and a long battery life.
“The challenges UK distributors are up against are undeniable. But there are also good reasons to believe that, irrespective of the outcomes of Brexit, 2020 may also bring new opportunities for growth and development,” she concluded.
