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In 2023, the electronics supply chain scrambled to create some stability after an intense period of product shortages, long lead times and other challenges. This year has already brought some new hurdles — but also opportunities.
Here’s a quick take on a few mega trends that are on the industry radar for 2024:
Geopolitics
In 2023, geopolitical tensions and wars erupted across the globe, including between Ukraine and Russia, Israel and Hamas, and China and Taiwan. Those conflicts continue in 2024. In addition, major ocean freight carriers are avoiding the Red Sea because of Houthi attacks on vessels. This has elevated freight rates and caused shipping delays.
In light of such challenges, supply chain mapping will be a critical activity going forward.
Despite tensions with China, the reality remains that an electronics supply chain that avoids China is unrealistic because China has tentacles from materials to fab equipment to manufacturing.
“Even if your product is produced in Malaysia and Mexico, the raw materials come from China,” said Josh Pucci, senior vice president of sales at electronics distributor Sourceability. “It’s difficult to not touch China when it comes to rare earth minerals needed to produce the chips.”
For example, China is a key source for gallium, germanium, and graphite, which are all used in components. “Knowing who your subcontractors are is only going to become more foundational,” said Bindiya Vakil, CEO and co-founder of Resilinc, a supply chain mapping, monitoring, and resiliency analytics company. “U.S./China relationships are on a downward trend, and China is an important part of the global supply chain.”
