If you are ignoring a mounting pile of obsolete components or earmarking them for scrap, you may be missing out on substantial gains. Many of CCL’s customers in the automotive sector have found that their surplus inventory has surged in value during recent weeks.
If you do not have the time to sell your overstock, CCL can provide an end-to-end excess inventory service to help OEM and EMS companies cash in surplus semiconductors while values are high. Companies can often achieve 60% to 100%, or more of original cost price. Find out how to get the best price for your excess electronic components here.
What has led to the components shortage?
There have been several causes for today’s components shortages. After an initial slowdown in car production in early 2020 due to Covid-19, a sharp rise in demand for consumer electronic goods followed. The subsequent purchasing power of technology giants such as Apple and Samsung forced car manufacturers to the back of the queue for procuring semiconductors.
This situation worsened in March with the Renesas factory fire, one of the largest global component suppliers for the automotive sector which will cause several months of delays. Jean-Marc Chery, head of Franco-Italian chipmaker STMicroelectronics predicts capacity constraints will last for several months.
In addition, there has also been a reduction in the global supply of the raw materials required for components, such as 8-inch wafers, glass substrates and ABF substrates. The most common affected automotive components include accelerometers, converters, regulators, MCUs, MLCCs, resistors, DRAM and FLASH memory, LPDDR4s, and MOSFETs.
The impact on car manufacturing
From the beginning of this year, car manufacturers have been forced to idle production for one or more vehicles and sometimes shut down altogether. Automakers like Volkswagen, Nissan, and Toyota, are cutting production and idling plants. Analysts are now forecasting that IC shortages could cost the industry as much as $110 billion. German semiconductor manufacturer Infineon Technologies has estimated that as many as 2.5 million cars will not be produced in the first half of 2021 due to ongoing supply chain shortages. Japan's second and third-largest automakers, Honda and Nissan, anticipate selling a combined 250,000 fewer cars this financial year because of the global semiconductor crisis. General Motors Co. and Ford Motor Co. are also facing huge losses in revenue this year due to difficulty securing much-needed components.
The rise of Electronic Vehicles
This year alone, global sales of battery electric vehicles (BEV) and other EVs are expected to increase by about 70%, further increasing demand for ICs. According to leading semiconductor market research company IC Insights, the average EV requires approximately $1,200 worth of components, which is double the amount used for an internal combustion engine vehicle. Electronics now account for around 40 percent of the total cost of a new car. New technology in cars such as Bluetooth connectivity, driver assistance, navigation, and hybrid electric systems, will inevitably require more chips and components. This trend is expected to continue in line with the trend for big data and analytics, cloud computing and digital services as drivers expect increased vehicle connectivity.
How can OEMs and EMS companies adapt?
Analysts at Gartner have advised OEMs supplying to the automotive sector to take the following steps to mitigate against the semiconductor crisis.
- Plan further ahead – extend your supply chain visibility beyond chip suppliers to the silicon level to foresee delays further into the future.
- Expand your network of suppliers – try to broaden your supplier base for sourcing chips so that you can spread your risk.
- Build up partnerships to guarantee supply – grow relationships with similar entities and chip foundries and/or OSAT players and join forces to improve your negotiating power. If your operation is large enough, consider pre-investing in a commoditised part of the chip supply chain and/or foundries to ensure a long-term supply.
- Monitor leading indicators – Track indicators such as capital investments, inventory index, and semiconductor industry revenue growth projections to predict overall trends.
Cash in your end-of-line components now to benefit from high prices
Despite the current shortages, you may find that you have some excess components which you no longer need for production. With many components in extremely short supply, OEM and EMS may find that now is an ideal time to sell excess inventory while prices are at an unprecedented high.
With CCL’s excess inventory management service, you can save time, free up valuable warehouse space and reap the benefits of today’s very buoyant market for automotive semiconductors.
Contact CCL for a free valuation of your electronic components overstock here.
Why choose CCL?
- High returns: Achieve the best prices for your surplus electronic components.
- Hassle-free service: We take care of all freight, insurance, and warranties.
- Fast payments: Receive payments quickly once a price is agreed.
- Flexible options: Choose OUTRIGHT BUY or CONSIGNMENT to suit your needs.
- Industry experience: CCL has 24 years of experience in the electronics industry.
CCL is a leading global provider of Excess Inventory Management solutions for OEM and EMS companies in electronic manufacturing. We buy and sell new and unused surplus electronic components worldwide.