Just as a test to find out exactly just how difficult it is to connect these darn lines between component shortages, handset availability and network choices, here's an old (1/31/2000) article.
Part shortages put purchasers in hot seat
By Matthew Sheerin, Electronic Buyers' News
Jan 31, 2000 (6:54 AM)
URL: ebnews.com
As a senior buyer at Lucent Technologies' manufacturing operation in Mexico, Agustin Ayala Yee has one tough job. Agustin, whom I met during a trip to Guadalajara last month, buys millions of dollars' worth of memory chips and discrete components for the plant, which builds cordless phones and digital answering machines. He has many responsibilities but points out one that takes most of his time and is by far the most challenging: figuring out which components will hit the hard-to-get list and creating a plan to ensure their availability. Agustin is not alone. Procurement and supply-chain managers throughout the world are facing similar frustrations, and the situation will surely get worse before it improves. As EBN reported last week, RF chips are the latest of several components in short supply. Some RF suppliers said they can't take on any more business this year.
The booming wireless market is the biggest factor for the surge in demand. It's the reason RF devices have joined flash memory, capacitors, and single-acoustic- wave (SAW) filters on the most-wanted list. The shortage has cost cell-phone manufacturers a ton of money in lost sales, and it's also hurt component suppliers that have planned for the uptick in demand.
In addition to the wireless segment, a host of other electronics markets are enjoying a jump in business, including networking, industrial, automotive, and appliances.
This environment has been particularly tough on smaller OEMs, which often end up on suppliers' B lists during periods of short supply. A reader at one of these companies recently complained to me that he was hit with a 200% price hike for a certain device. And he warned that the current supply-demand imbalance ?is a lot worse than you've been reporting.?
So what's next on the list? We have our reporters ask that question daily. And if you're a procurement or supply-chain manager, that's exactly what you should be doing. Like Lucent's Yee, you need to be sharing forecasts and demanding certain amounts of supply. And you need to enlist the support of the highest levels of your company to map out a sourcing strategy for the next 18 months or so. Should you build inventories of certain components and risk getting stuck with obsolete parts? Should you tap alternative sources of supply, or strengthen relationships with certain chip brokers?
Good luck coming up with the answers, and stay tuned for news of the next parts shortage.
eoenabled.com
Or how about this, straight from the earnings report of the number 2 handset supplier in the world!!!!!
In the first quarter, meanwhile, the world's second largest cell-phone supplier said its operating profits for these products were $49 million, a 41% decline over $83 million a year ago. Its cell-phone sales rose to $3.2 billion, a 24% jump over the like period last year. The company blamed the results on a shift in product mix toward lower-margin cell-phones and select component shortages. For some time, cell-phone makers have faced shortages of flash memories, SAW filters, and most recently, RF-chips and LCD driver ICs.
CELL-PHONE COMPONENT SHORTAGES ARE EXPECTED [TO BE A FACTOR IN OUR BUSINESS] FOR THE SECOND QUARTER AND BEYOND, said Growney in a conference call to analysts earlier today
[caps mine]
Note the uncanny repetition of the same, exact supply chain dynamics that torpedoed Apple so many times and relegated it to its current niche standard status. |
