Electricity production entities are multiplying in number
The Ifo Institute's latest survey has revealed a concerning trend of increasing material shortages across various industries, with the electronics sector experiencing a significant spike.
According to the report, published on Wednesday, 12.7% of electronics companies reported material shortages in July, a notable increase from 5.7% in April. In contrast, the overall industry currently reports 5.8% of companies facing supply problems, a slight increase from 4.1% in April.
The increase in material shortages is not limited to the electronics industry. In the production of woodware (excluding furniture), 12.0% of companies reported material shortages. The proportion of affected companies in the automotive industry has also risen, from 0.9 to 7.1%. However, in other industrial groups, the proportion of affected companies remains below 10.0%.
Klaus Wohlrabe, head of Ifo surveys, attributes the increase to Chinese export and trade restrictions on certain rare earths. The exact rare earths affected by these restrictions are not specified in the article.
The causes of these shortages are multifaceted. Supply chain disruptions from geopolitical tensions and military conflicts, dependence on overseas sources for raw materials, chronic underinvestment in mature semiconductor node production capacity, lingering impacts of COVID-19 disruptions, and labor shortages and slow production processes for semiconductor equipment all contribute to the problem.
If the trend continues, other industries such as machinery and automotive could also be affected, according to Wohlrabe. The potential long-term impacts of these shortages and related pressures across industries include hindered innovation, production slowdowns, increased costs, and possible redesigns in fields like AI, electric vehicles, automation, and military electronics.
The ripple effect of these shortages impacts raw material suppliers, logistics providers, and distributors, driving investments in digital supply chain management technologies to improve transparency, forecasting, and resilience against geopolitical risks.
In summary, the electronics industry's material shortages stem from complex global supply disruptions, geopolitical conflicts, chronic underinvestment, and pandemic fallout. Long-term, these shortages threaten the innovation and production capacity not only of electronics but also adjacent industries such as automotive, machinery, and defense, pushing the ecosystem toward enhanced digitalization and strategic sourcing adaptations.
- The increasing material shortages in the electronics industry could potentially spill over to other sectors like finance, as hindered innovation and production slowdowns might increase costs for businesses.
- The digitalization of supply chain management technologies is becoming increasingly important in response to global material shortages, as they improve transparency, forecasting, and resilience against geopolitical risks in various industries, including technology and business.
