Several tech manufacturers, including Apple, Samsung, Sony and Acer, are facing production issues due to the ongoing component shortage. Discussions around shortage and related keywords rose quarter-on-quarter by 74% in Q1 2021 compared to Q4 2020, with around 17% of the mentions about impacts on production and capacity, according to the Filing Analytics platform by GlobalData.
Rinaldo Pereira, Senior Business Fundamentals Analyst at GlobalData, comments: 'The current scenario looks concerning for tech manufacturers, as mentions around new product and shipment delays rose by around 23% in Q1 2021. Additionally, 3% of the overall shortage mentions in Q1 2021 highlights that the adverse impacts are likely to last until 2022 or early 2023 due to the huge boom in demand. There is a sudden spike in semiconductor-related shortage mentions in Q1 2021 as companies remain concerned about long-lasting pandemic-led supply chain disruptions, which also seems to have been spurred on by the US Government's sanctions on China.'
The supply disruptions are also impacting other sectors. In particular, the automotive sector continues to feel the pinch of the disruptions and has faced production delays. David Leggett, Automotive Analyst at GlobalData, predicts that the shortage will last well into 2022.
Component manufacturers' filings sentiments are up by over 20% in Q2 2021*, as they look at boosting profitability via price increases, while stockpiling remains an issue in Asia. Companies procuring components seem to be concerned about escalating prices, with discussions around the same also rising multi-fold in Q1 2021.
Pereira notes: 'In the 2021 filings of the tech sector, around 33% of the sentences with shortage and related keywords were negative, while 47% were neutral. The negativity suggests that manufacturers are unable to keep up with the widening supply-demand gap.'
Governments in the US and the EU are pumping funds into domestic manufacturing facilities to reduce dependencies on components from Asia. Taiwan semiconductor manufacturers face production pressures due to COVID-19, adding to the plight of tech companies.
Pereira concludes: 'Looking on the bright side, discussions around production capacities in filings of component manufacturers were also up in Q1 2021. Companies including Intel and Taiwan Semiconductor Manufacturing Company (TSMC) have committed to capacity expansions to address the long-term demand.'
* Until 7 June 2021