Recently, you may have noticed long delays in many items being delivered throughout the UK  leading to empty supermarket shelves etc. Drive Manufacturers are no different, and all are now quoting extended lead times with one manufacturer based in Finland now quoting over 6-month delivery on some standard drive types and sizes!

To understand why this is happening, and how to avoid this issue affecting the performance of your company and your engineering department read on…..

 

A huge demand for electronic products:

The Covid-19 pandemic has spurred demand for consumer electronics. The first lockdown saw people buying PCs, monitors and other gear for working or going to school remotely, these products contain multiple chips, not just a single core processor, but also smaller chips that control display brightness etc. thus meaning supply is the lowest in years and with demand growing daily, manufacturers are simply overwhelmed.

 

Shipping container shortage:

A global issue being faced is a lack of shipping containers, really linked to Covid19 and increasing demand. Producers are seeing significant difficulties in sea and land transport. There is a shortage of containers on the market, which, as a result of the broken trade routes, have ended up in various locations and ports around the globe. Their prices have skyrocketed. For comparison, container transport prices between China and Europe have increased by more than 400% since  2020.

 

Pricing:

A very undesired outcome of the shortage is pricing pressure.   This is happening not only to silicones but with just about every product/commodity produced.

 

Supply:

In  2020, most raw material suppliers saw orders/demand drop between 15-40%. When this happened, companies reduced their inventories to very low levels to conserve cash since no one knew how long the pandemic was going to last. Once demand started to pick up, turning on production was not that easy, Furthermore,

Shortages are being experienced in several areas, significantly steel and plastics. Copper is another material where shortages have been seen, stemming from lockdowns in producer countries such as Peru.

 

Covid-19:

The pandemic temporarily disrupted semiconductor shipments as global demand for new mobile devices, PCs, and data centre upgrades surged in response to remote work. Although most semiconductor manufacturers recovered from their initial disruptions, the chip sector still couldn’t satisfy the markets ever growing rate of demand, as a result of this analysts have estimated that, you may not receive your delivery until the latter half of 2022.

 

Droughts in Taiwan:

Taiwan is home to some of the world’s biggest and most advanced high-tech foundries, a linchpin of a global $450 billion industry that provides the computing power for essential devices but is extremely water intensive, The semiconductor manufacturing industry uses billions of gallons of water a year to keep components clean.

During the first three months of this year, rainfall has been less than 40% of the usual rate and In southern Taiwan, levels at the largest reservoir Tsengwen have fallen to a 15-year low at less than 12% capacity while the Baihe reservoir is completely dry. As a result of this semi conductor manufacturers in Taiwan are unable to produce the same standard of product, leading to extremely long delivery quotes.

 

Trumps trade war:

Last last year, the U.S. placed restrictions on Semiconductor Manufacturing International (SMIC), the biggest foundry in China, barring it from getting advanced chip manufacturing gear, and making it much harder to sell its finished products to companies with U.S. ties. As a result of this, globally, import costs on all Chinese made semi conductors have seen increases.

 

Manpower:

People were furloughed or laid off in lockdowns. When demand started to pick up, companies were not able to get the manpower needed to produce product to meet demand. Covid-19 quarantine protocols had a significant impact on manpower. Many companies reported up to 5-10% of the workforce were in mandatory quarantine over a 2–4-month period. In addition, additional government unemployment schemes have made it less attractive to come back to work, meaning manufacturers, in some cases cannot satisfy growing demand.

 

Stockpiling:

One of the industry’s biggest chip buyers was Chinese telecommunications giant Huawei Technologies Co. In anticipation of being put on a US trade blacklist, it  began stockpiling chips from 2019. Much like the Uk’s toilet role stockpiling issues, this only worsened the situation, Because of decisions like this, customers can expect waiting times of up to one year on semi conductor orders, as it can take up to 6 months to correctly manufacture a wafer of semiconductors.

 

No short term fix:

Restoring the supply and demand balance will take time because semiconductor manufacturing is not suited to rapid and large shifts in demand. The manufacturing process of a semiconductor is one of the most complex manufacturing processes. Lead times of up to 26 weeks are the norm to produce a finished chip And as the overall demand for chips increases, the manufacturers simply don’t have the capacity to meet the demand in the time required.

 

Overall:

“Chips are likely to remain in short supply in coming months as demand remains higher than ever. The Semiconductor Industry Association said in December that global chip sales would grow 8.4% in 2021 from 2020′s total of $433 billion. That’s up from 5.1% growth between 2019 and 2020 – a notable jump, given how large the absolute numbers are.”

 

 

The Solution

Largest UK Drive Stock Holding

Here at Quantum Controls, we stay prepared, Quantum hold the UK’s largest stock of VSD with over 1,500 drives in stock from major manufacturers such as ABB, Danfoss, Siemens, Schneider, Mitsubishi and more, we are currently able to use our stock to deal with the supply problem major drive manufacturers are experiencing. If you are being quoted long unacceptable lead times then try us, we stock in quantities, send your enquiry today to check our vast stock holding

sales@quantum-controls.co.uk

 

Largest Fleet of Temporary Rental Drives

Our engineers are available to deliver and install a suitable temporary drive-in modules or weatherproof enclosures to your site anywhere in the UK 24/7, until the delivery of your new drive. Keeping your plant running until your drive is delivered.

Contact P.stelling@quantum-controls.co.uk

Out of Hours Call 0330 9000247

 

Long Term Lease agreements of Variable Speed Drives

At quantum we offer long term lease agreements on all our drives to keep your plant running while you wait for your delivery, or until your failed drive has been repaired. Our long term lease service keeps your costs low and the factory running, meaning no threat of down time costs.

Contact P.stelling@quantum-controls.co.uk