86% of vendors report impact on financial sustainability if shortages and high prices exist for another 12 months, reports IABM, exclusively revealed by IBC.
It’s the worst kept secret in the industry, but few manufacturers are prepared to talk about it openly. The supply chain shortage, which has dragged on for over a year, not only shows no sign of abating but has gotten worse. The impact on broadcast technology vendors is near universal with an alarming 63% of them reporting severe problems in sourcing components as of this month.
According to a new industry survey conducted by the IABM – exclusively revealed by IBC365 – the stranglehold on the supply of key product components such as semiconductors is affecting 97% of vendors, with 63% flagging this as severe. That’s up from 40% of vendors in April 2021, when the IABM first polled its members.
An alarming 40% of businesses warn of a severe impact on their financial viability if the issues are not solved in 12 months. Some 86% of companies will experience moderate or severe problems if conditions persist.
“The findings of our first survey on supply chain problems with electronic components last April painted a worrying picture for our industry,” says Peter White, CEO, IABM. “The results of this follow-up survey demonstrate that the position has deteriorated further in the intervening months, and will result in significant financial impact if the problems continue for the next year.”
Lead times have been most affected by the disruption, with companies reporting on average a 74.1% increase compared to usual. Anecdotal evidence suggests prices have soared by 30-50% in the last year for certain components and this is confirmed by the IABM survey which pegs inflation at 44%.
Some of this cost is being absorbed but margins are being cut and average prices of final product are now up by over 25%.
Microprocessors of all types and power devices seem to be the most limited in supply, reports one vendor. “It’s not just chips but motherboards and also a wide-ranging number of other components,” says Lorenzo Zanni, IABM Head of Knowledge, who conducted the survey. IBC