Semiconductor Outlook for Q2-2021
Semiconductor Outlook for Q2-2021
As we begin the second quarter of 2021, many positive signs are just starting to return. Our world is slowly beginning to open up. However, there are many cautions still in place. With all of this going on, the semiconductor industry has become very robust, with a wide range of its segments heating up. Automotive, 5G, and IoT have experienced quick ramp-ups in production. This has created numerous challenges for the supply chain. Lead times are lengthening, some suppliers are requesting NCNR commitments on long-lead-time scheduled components, and we are seeing price increases across virtually all product segments and suppliers.
In an environment like the one we are currently experiencing, many companies have to get creative to survive and thrive. Some companies are seeking supply assurance by scheduling their backlog out past extended lead times. Some even have to postpone new designs and search for parts to support last-generation programs to keep up with demand. Typically, a thriving economy with conditions like the current market will force companies to look for components anywhere they can find them. This can lead to an unfortunate set of circumstances where they may procure nonconforming, untraceable parts from the grey market. As you know, components from the grey market usually lack legitimate traceability, are subject to unknown quality issues, and may even be counterfeit. This is the type of product you want to avoid at all costs.
Flip has been on a continuous investment path, working closely with our authorized lines by stocking unique inventory. This inventory is usually EOL and obsolete factory stock that the manufacturer no longer markets. We have worked closely with these OCMs as they prune products from mainstream distribution channels. Flip consistently invests in inventory to ensure that a wide variety of devices are still available for sale. We have seen countless examples of how this keeps OEM and CM manufacturing lines up and running.
Obsolescence is our specialty. It is where we focus all our efforts. In some cases, we may not have the exact device a company seeks to procure. However, we are committed to finding a solution to maintain a steady supply chain. We have the ability to determine substitutes that will require the minimum amount of redesign to assist our customers. In these challenging times, we encourage you to give Flip a chance to help you out before turning to the grey market. Thanks for all your support.