Verical Communications

Market research firm IC Insights is predicting a “surge” in the global market for IC’s according to a forthcoming report. Calling for a growth spurt in the worldwide IC market of 18%, IC foundry Sales to increase 43% and semiconductor capital Spending to increase 28%, IC Insights may be one of the more optimistic analysts out there, but they are hardly alone.

If we’re about to see a broad uptick in activity, the production buyer has to ask: am I ready?

Pointing to national GDP projections call for a swing from -3.7% to +1.3% in US GDP and a 38% jump in Chinese GDP from 6.3% to 8.7% growth between 1H09 and 2H09, IC Insights is expecting a pretty sharp swing in global markets. If this comes to pass, demand is going to pick up quickly all across the electronics supply chain. There have been a lot of stories detailing how chip manufacturing capacity has been taken offline recently. Shutting a foundry down is a fairly quick process – restarting it can take a long, long time.

So what’s that mean to me? How about enormous lead times? Allocation? Counterfeit? So what is a component buyer to do? One thing is to take a look at your relationships with independent distributors and brokers – shortages are coming you’re going to need help!

Just because a company is on the AVL doesn’t mean you can relax and just trust them. Dust off some of your old assumptions and take a look at these firms: have they been having problems with counterfeit and returns? Have you been getting a hard time from them when negotiating? How strong are your relationships with your reps? Can you centralize some of your spend? Can you trust your independent distributor enough to focus your spend on them?

Check the discussion boards, talk to your peers about their experiences, do whatever you can to make sure your relationships are good.

Got any good tips for preparing for the “surge”? Share them in the comments space below.