Deconstructing the chip shortage

The impact on engineering and product design

How are engineers around the world coping with chip constraints and associated longer production lead times?

How long do they expect the chip shortage to last?

Avnet surveyed 530 engineers from across the globe to find out what the chip shortage means to them and their outlook on what's ahead. Our report documents how the ongoing chip shortage is impacting how engineers buy and design with electronic components.

The survey was conducted among 530 global engineers who are Avnet customers. 31% of respondents were based in the Americas, 56% in EMEA, 10% in Asia and 2% in Japan. The respondents represent a wide range of companies from contract manufacturers to electric vehicle makers. The results reflect the experience of engineers who took the survey and are not representative of the overall population and market conditions.

Research overview

The global semiconductor shortage has resulted in longer lead times, higher prices, more time spent searching for parts, and the adoption of new tactics to compensate when preferred parts are not available.

Engineers don’t expect the situation to change much over the next 12-18 months. A key theme underscored in the data is the high degree of resiliency and resourcefulness with which design engineers have responded to the problem — a storyline overshadowed by the very real logistical challenges facing the industry.

As the global chip shortage persists, product design engineers are pursuing new ways to get their jobs done. They have had to be resourceful, impacted by a shortage that continues to be fueled by surging demand as pandemic-related production and distribution disruptions drag on, amplified by capacity issues in wafer, assembly and test. The results: Skyrocketing chip prices and more time spent searching for parts versus focusing on design.

Research highlights

• More than three-fourths of respondents say finding the parts they need has been a “very significant challenge.”
• Respondents report that microcontrollers (MCUs) are the most constrained of all parts.
• Among those who reported a significant impact from the chip shortage, close to all (93%) said they are experiencing longer lead times. A strong majority expect lead times to worsen and prices to rise in the next 18 months.
• The shortage is changing the priorities for engineers when choosing parts; 64% say that availability drives the selection process today.
• The use of alternative parts is causing engineers to redesign boards and make changes in software and firmware.
• Design engineers are using alternative sources for parts.
• When using non-authorized distribution channels, engineers have significant concerns about counterfeit parts control, which could compound design and quality issues.

The survey unveiled a significant opportunity for distributors to recognize and support their engineering customers’ resourcefulness by becoming even more of an information hub. As customers continue to navigate the shortage, distributors can deliver access to data on parts and alternative options and provide expertise and insight. They can also help customers rethink their design process in the context of market trends.

We know that each change a business makes to its supply chain comes with risk. And we know there’s no one size fits all. So, if you'd like expert support with your supply chain challenges, please get in touch. We'd love to see if we can help.

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