The agreement comes as demand for high-performance, reliable relay solutions continues to grow across industrial automation, automotive, energy, and smart building applications. The partnership will introduce high-quality relay and switching technologies to Farnell customers across EMEA, expanding choice and improving availability for design, maintenance, and repair engineers.

Hongfa Europe will work closely with Farnell to support the rollout, ensuring efficient service, streamlined product introductions, and reliable technical support ahead of the full range becoming available online in early 2026.

The agreement gives customers access to Hongfa’s most in-demand product lines, including power, signal, automotive, industrial and solar relays, alongside an extended portfolio of relay sockets, low-voltage devices, connectors, film capacitors, and current sensors.

This partnership supports Farnell’s strategy to expand its electromechanical portfolio and enhance choice for engineers across EMEA.

Customer benefits include:

• Range: broader availability of reliable, high-quality relay solutions
• Access: easier online ordering once live
• Speed: fast delivery through Farnell’s EMEA logistics network
• Expertise: access to Hongfa’s established relay engineering teams

Andrew Weatherill, VP Global Product, Farnell Global, said: “We are excited to welcome Hongfa to Farnell’s electromechanical portfolio for EMEA. Their strong reputation for engineering excellence and high-performance relay technologies makes them an ideal addition to our line card. This partnership expands the choice of high-quality relay solutions available to engineers across Europe, supported by fast delivery and trusted technical support.”

Daniel Bayer, Sales Manager Distribution, BeNeLux, East Europe + Baltic, Hongfa added: “We are delighted to partner with Farnell to make our comprehensive product range more easily accessible to customers across Europe. This collaboration is an important step in strengthening Hongfa’s market presence and providing faster, more efficient service to engineers and purchasing professionals.”

Hongfa products are available to purchase on Farnell’s EMEA storefront: uk.farnell.com/b/hongfa

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Automotive companies and their partners in the semiconductor industry are working furiously to simultaneously negotiate those several complex, interrelated technological evolutions while also dealing with disruptions in global supply chains.

What market turmoil taught the auto industry

The fabless semiconductor model was pioneered decades ago. For a very long time it has been hard to justify the capital expenditures required to own and run a fab, and now it is unremarkable to establish an IC company without in-house manufacturing capability.

The fabless approach is perfectly viable until it isn’t – and now, because geopolitical tensions have been ratcheted up, chip companies have to reconsider their manufacturing strategies. Import/export rules are in flux, and tariffs have become unpredictable and occasionally punitive. All of a sudden, where a fab is located and the nationality of its investors have ramifications that can suddenly turn any company in the semiconductor supply chain into a geopolitical football.

A recent example is Nexperia, based in The Netherlands but owned by Wingtech in China. Geopolitics have compelled the governments of both countries into actions they otherwise might not have taken. The geopolitical pressures and the responses to them inevitably created consternation among everyone involved, including participants in the automotive market who depend on Nexperia as a supplier.

This was hardly an isolated incident of turmoil in the automotive IC market (or the larger IC market); Nexperia’s experience is merely recent and one of the most publicised examples of how geopolitics is roiling automotive industry supply chains.

This ongoing geopolitical turmoil is demonstrating to markets that it can be advantageous for IC manufacturers to support at least a hybrid manufacturing model, if not a fully integrated manufacturing strategy, because maintaining the ability to manufacture circuitry, components, and sensors based on core IP (intellectual property) – with the option of outsourcing the production of commodity devices – can be a bulwark against supply chain disruptions. The same rationale can and often does extend to other critical steps, such as testing devices based on core IP.

This is playing out differently for different companies. At TDK-Micronas we recently brought more of our operations in-house, decreasing dependency on external sources (we have locations in Europe, while our manufacturing partner was in Taiwan). We’ve expanded our in-house backend packaging and testing operations, leading to a 30% increase in maximum wafer throughput per day. This includes investments in automation systems, including wafer handlers and testing equipment, that allow us to process more wafers, package more ICs, and test them.

We are also adding in-house production capacity for micro electromechanical systems (MEMS). The additional capacity will accommodate growth in demand for our MEMS products, and will be dedicated mainly to our most advanced products, though it will also be capable of producing legacy products. Adding this capacity locally will, in one stroke, create more flexibility in our supply chain, decrease our dependency on a single source in Asia, and mitigate geopolitical risk.

We can also open our fab to other MEMS designers, creating an additional revenue stream, ensuring high utilisation of the capacity with less exposure to potential swings of demand of our own products.

Texas Instruments, meanwhile, which already has extensive in-house manufacturing, recently announced plans to spend up to $60 billion to build enough factories that it will be manufacturing more than 95% of its own products in-house by 2030. Contract manufacturing giant TSMC is expanding internationally, geographically diversifying its mostly Taiwan-based operations with new foundries in the United States, at an eventual total cost of $65 billion.

Measured reactions

Despite geopolitical pressures, supply chain diversification has been measured, understandably given the difficulty and the vast sums of money involved.

Layer upon that uncertainty regarding the technology itself. For example, a few years ago, the automotive industry seemed to be moving rapidly and inexorably toward electric vehicles (EVs). Demand appears to be shifting back to drivetrains that encompass internal combustion engines (ICE). Consider that this trend, nominally about technology, also has a geopolitical dimension.

It all makes supply chain diversification fitful. Geopolitical attitudes keep shifting. Market demand has vacillated. Any conditions the semiconductor and automotive industries respond to today could unexpectedly change next year, or the year after.

Even with all the unpredictability, it is important to understand there are strong countervailing, stabilising influences, including the list of automotive technology trends themselves. Electrification in the automotive market is proceeding. ADAS technology is always being improved. The evolution toward SDVs is continuing apace. The architecture of motor vehicles continues to include more electronics organised in increasingly centralised architectures – and that is true not just of EVs and hybrids, but ICE vehicles too. In-cabin electronics will continue to be refined, and development of V2X technology continues apace. That the automotive industry will have ongoing need for ICs, sensors, and components will help smooth things out from the demand side.

Hybrid cars, hybrid suppliers

The automotive industry is still moving forward; and the geopolitical conditions are what they are. Advantages will continue to accrue to IC suppliers who maintain selective in-house manufacturing and other critical supply chain steps.

The just-in-time (JIT) manufacturing model has been widely adopted in the automotive and semiconductor industries, but JIT-based supply chains have proven sensitive to major disruptions. Given the frequency of major disruptions recently (e.g., a pandemic, tariff wars), it has become an entirely reasonable strategy to maintain several months’ worth of inventory.

That speaks of the relative ease of assuring continuity of supply, but the advantages of in-house manufacturing go beyond that. Process control and traceability is extremely important in automotive compliance. Automotive semiconductors require long-term traceability, quality assurance, and continuity of development. In-house manufacturing makes it much easier to perform continuous audits and achieve truly low part-per-million (ppm) defect rates, goals that can be supported by also performing in-house testing, including wafer-level testing. The participation of external partners can result in scalable volume production.

Geopolitical benefits include local-for-local supply chains, and the associated advantage of being able to provide homogenous levels of service.

Product mix can help as well. We can cite our own example, but there are others with analogous experiences. The number of new motor vehicles being sold is not growing as quickly as in previous years, which seems as if it might depress semiconductor sales, but appearances can be deceiving. The number of sensors being incorporated in several vehicle subsystems is growing, independent of total vehicle sales. TDK-Micronas specialise in magnetic sensing technologies (tunnelling magnetoresistive [TMR] sensors, Hall sensors), and advanced embedded motor drivers, providing an additional buffer.

IC suppliers can also focus on increasing the value of their products. In our case, we are working to co-package sensors and driver ICs, which saves space (important in automotive) and reduces cost.

Conclusion

Every market has always had its ups and downs. Both the automotive or semiconductor industries are practiced at negotiating economic fluctuations and technology disruption. Geopolitics merely compounds the difficulty of doing business. The point is that even if supply chains are particularly unsettled, the automotive industry and its semiconductor suppliers understand the practices and strategies available to us to restore market balance.

About the author:

Karsten Köhler, Business Development Manager at TDK-Micronas

The post Automotive evolution, ICs, and supply chain disruption appeared first on Procurement Pro.

One of the key reasons for the enhanced relationship between the two companies is the success of the innovative programmes that Anglia runs in the UK and Ireland with Digi to develop new business. Examples include where the two companies have collaborated to deliver technical workshops providing an introduction to RF communications and connecting wireless sensors to the Cloud for remote monitoring and control, as well as discussing Digi’s hardware, software, and development kit solutions.

“The Nordic and Baltic regions have a large number of SMEs and Contract Electronics Manufacturers, just like the UK,” says John Bowman, Anglia’s Marketing Director. “Such customers can often be left behind by the big high service and production fulfilment distributors, whereas for Anglia, they are a key part of our customer base. We look forward to growing with Digi in these regions.”

Jurgen De Biscop, Senior Channel Manager for Digi in the EMEA region adds: “We have been impressed by Anglia’s commitment to demand creation and new customer development in the UK, which is why we presented them with an award for this activity last year. We are delighted to extend the relationship and look forward eagerly to enjoying even greater success together.”

Anglia’s Nordic/Baltic agreement with Digi follows hot on the heels of a similar business extension with STMicroelectronics, and the three companies are collaborating to deliver a one-day event, titled ‘Learn How to Seamlessly Transition to Linux-Based MPUs’ in Reading, UK on the 22nd April.

Anglia is currently interviewing candidates for a Managing Director and FAEs based in the Nordics to support its business activities in the area.

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The STM32 32-bit microcontrollers are based on Arm Cortex-M cores (M0, M0+, M3, M4, and M7) and combine high performance, real-time capabilities, digital signal processing, and low-power, low-voltage operation. Their scalable design makes it easy for electronic design engineers to choose the right trade-off between energy efficiency, computational performance, security, and the range of peripherals for their system. The family includes high-performance variants, such as the STM32N6 MCUs, ultra-low-power variants, such as the STM32U3 MCUs, and multi-protocol wireless variants, such as the STM32WB MCUs. Applications include the Internet of Things (IoT), fitness and healthcare, smart homes, robotics, drones, smart agriculture, and automation.

ST’s industrial motion sensors are high-performance and ultralow-power sensing solutions for Industry 4.0 and 5.0 with a minimum longevity commitment of 10 years. These STMicroelectronics sensors offer high performance and quality for industrial applications like robotics, condition monitoring, industrial vehicle guidance, and stabilisation. These sensors feature a robust and highly selective testing flow to guarantee accuracy, reliability, and safety.

ST’s power MOSFET portfolio offers a broad range of breakdown voltages from -500V to 1500V, with low gate charge, low on-resistance, and improved packaging. ST’s process technology for both high-voltage and low-voltage MOSFETs has improved power-handling capability, enabling high-efficiency solutions. These MOSFETs are offered in over 30 package options, including the 1mm-high surface-mount PowerFLAT 8 x 8 HV.

The STSPIN9P1 motor drivers are an extremely flexible platform that supports a wide range of low-voltage motors with power ratings up to 500W, including stepper, brushed, and brushless DC motors. Thanks to the integration of low RDS(ON) MOSFETs (16 mΩ or 27 mΩ, depending on the model), the bill of materials (BOM) savings compared to discrete solutions are substantial. The series features a wide range of supply voltages, from 7V to 75V. These devices offer a set of pin-to-pin-compatible half-bridge and full-bridge topologies, enabling coverage of a wide range of applications, including stage lighting, factory automation, ATM and money handling machines, textile machines, home appliances, and more.

To learn more about STMicroelectronics products available from Mouser, visit https://www.mouser.com/manufacturer/stmicroelectronics/.

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“We expected Europe would bounce back later that the Americas and Asia/Pacific, and that’s what happened. We would have been happy with single digit growth, but it rebounded more than we expected.”

A return to growth in its German business was a boost. Notes Ducharme: “It represents 22% of our business in Europe, so we needed it to start growing back, and it did.”

The fastest growing European markets for Mouser were Spain and Poland. The former is stimulating business through the government’s investment through its Recovery, Transformation, and Resilience Plan (PRTR). The Polish market has been energised by a supply chain shift away from Asia.

“Poland is a good physical location in Europe,” says Ducharme, “and more and more electronic manufacturing service companies are moving there.”

Steve Rawlins, Anglia Components’ Chief Executive Officer was less ebullient. “The market has been dreadful; it goes back to lots of excess inventory that customers are slow to burn off.”

Solsta’s Managing Director Jon Baxter saw the recovery pushed back through 2025. “Not any one thing,” he says, “though customers’ inventory took longer to burn off than anticipated.”

Dan Ford, Vice President, EMEA Sales at Farnell turns to a sporting cliché.

“2025, you could call it a game of two halves. I think the first half of the calendar year continued to be a real struggle. I think there was belief towards the back end of 2024 that the first half of 2025 would start to show some signs of recovery, but Q1 and Q2 were a struggle.”

He cites customers still challenged with high inventory levels and economic and geopolitical situations not helping.

“I think the second-half of the year we definitely started to see some signs that maybe we’d bumped around at the bottom for a while, and things had started to improve a little bit through the back end of Q3. September and October really started to see some improved market conditions, not massively dramatic in terms of a turn around, and some signals as to demand starting to increase a little bit and book to bills starting to improve.”

Adds Ford: “A few countries performed a little bit better than were expected and there were a couple that didn’t. I think Germany continues to struggle. I think its dependency on the automotive sector has an impact, so its market potential has obviously suffered and continues to be very challenged, not just in the tier one automotive manufacturers, but then the knock-on effect to supporting companies.

“I think France actually started to show some early signs of improvement and had probably a better Q3/Q4 than many were expecting and some of the Nordics as well. We started to see some signs of recovery that might come, again, down to some of the market sectors that are more fruitful, potentially in those markets such as defence and aerospace. The UK, in terms of some of the other big nations, was relatively average I would say, in terms of recovery. So a little bit better maybe than Germany, but probably not quite as good as France.”

On lead times and Average Selling Prices (ASPs), Ducharme cannot detect enough of a trend to draw any firm conclusions.

“Some lead times are going out,” she comments, “but not crazy on the semiconductor side. At present, manufacturers do not have enough visibility from their customers.

“Our advice from passive component manufacturers right now is to start planning demands for the next six months at least and provide them with some forecast visibility. When the ramp up comes, lead times could move up sharply if extra production capacity has not been put in place.”

The advance of AI is also impacting prices.

“AI requires a lot of processing so the memory market, especially DDR3 and DDR4 devices, is very buoyant, lead times are lengthening as suppliers prioritise different chip geometries and priorities,” observes Solsta’s Baxter.

Anglia’s Rawlins sees ASPs rising slowly: “We haven’t seen any major price increases yet, but they are coming,” he warns.

He also believes customers will soon need to change their buying patterns or they may run into trouble. “Customers across the market have too easily been able to buy what they want, when they want. That tide is now turning. Customers need to look at forecasting, and placing schedules for orders. If they are buying ad hoc they will run into trouble by the middle of the year.”

Rawlins notes tantalum capacitors as a bellwether for a market upturn. “Our sales increased by 30 to 40% last month. Small signal SO23 parts also picked up, that’s a good sign.”

Ford points to AI and data centres impacting prices. “We’ve seen some price volatility certainly on the memory side, there’s been some huge spikes in memory prices as demand for those products is increasing,” he comments.

“There’s then also the impact of tariffs,” he argues. “How can we have a call without talking about tariffs and the knock-on effect of tariffs on raw materials or on different geographic situations?
“It is leading to some manufacturers having to put up the pricing on some of the technologies that we acquire. So, for example, in the test and measurement space and in the single board computer space, we’ve definitely seen some increased prices.

“That said, it’s probably balanced by some price decreases,” adds Ford. “In some of the areas where the demand is a little bit lower and the supply is higher. So, for example, in the passives area and in some of the interconnect and e-mech products, I think there has probably been seen some price erosion in there. But on both increases and decreases, I wouldn’t say anything overly dramatic or see as a major trend.”

Can 2026 provide a big bounce back year?

Baxter at Solsta cites the defence and medical sectors as growth drivers.

“The medical market is doing really well and was a strong market in 2025,” he comments. “Security is also a promising sector and customers are showing more interest in AI and AI accelerators.”
He is encouraged by customers seeking face to face meetings with the sales team and the Solsta field applications engineers are well prepared to explain the benefits of suppliers’ products and what they can deliver for customers.

“AI is becoming less hype and more concrete,” remarks Ducharme. “There are real projects and prototypes so we expect AI to monetise in 2026. Sustainability has become more important for customers, and there is activity around security with the Cyber Resilience Act.” She also marks quantum computing as a sector that showed promise in 2025. “Defence is also booming, especially in France, as well as medical market activity in France and Italy.”

Farnell’s Ford is encouraged that design activity is definitely on the increase.

“I think there was a period where customers were less focused on innovation as we came through that COVID period and I think customers were more intent on taking their existing designs and enabling them for longevity in terms of the allocations that we saw.

“That led to many customers having challenges around their existing designs because they were designed around a single footprint or a single microprocessor, for example. I think that turned a lot of the attention from the engineering side to make sure that their designs were more robust, more resilient in terms of being able to switch between manufacturers and different technologies to keep their production lines going.

“I think that’s changed now, probably over the last six to 12 months, where I think there’s a general sense that customers have gone back to understanding that innovation is what’s going to protect them and differentiate them from their competitors and continue to allow them to take market share. So, I think we’ve definitely seen an increased demand and one of the ways that we see that is through our evaluation kits, which is a strong part of our portfolio. We’ve definitely seen an uptick globally on the demand for our evaluation kits. So I think that’s a good leading indicator in terms of the innovation and design activity that we’re seeing across various industries and geographies now.”

“2026 will be quite interesting,” is Rawlins’ summation. He is targeting 10% growth in 2026. “Customers are starting to reorder, so I think we are coming to the end of what the customers were holding on their shelves. And the number of hits on our web pages has jumped 40%,” he says. “We are now recruiting, and we have new lines to be launched in 2026.”

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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A pivotal milestone came in 1967 when Waldom signed its first agreement with Molex, establishing a partnership that remains Molex’s longest-standing distributor relationship. In 1986, Waldom moved into a new facility, supporting continued growth and consolidation.

In 2003, Waldom was acquired by the Nizam family, with Basel Nizam leading the company’s transformation under a master distribution model. That same year, Waldom signed TE Connectivity, reinforcing its position as a key global distributor. Over the following years, Waldom expanded rapidly, launching its Green Stock excess inventory solution in 2010 and opening offices in Amsterdam and Singapore to support EMEA and Asia-Pacific operations.

By 2018, Waldom had further strengthened its global footprint with offices in Shanghai and Shenzhen, surpassing $100 million in annual global turnover. Continued growth led to the opening of a new US warehouse in Georgetown, Ohio, in 2020.

In 2022, Don Akery was appointed CEO, ushering in a new phase of leadership. More recently, Waldom has deepened its commitment to sustainability, publishing its first ESG report in 2024 and, in 2025, achieving global ISO 9001 and 14001 certifications, committing to a net zero roadmap, and installing solar panels across key facilities. Today, Waldom serves more than 2,500 distributors worldwide, with a significantly expanded inventory and a strong foundation for continued global growth.

“Waldom is a nearly 80-year-old company, recognised as a trusted and well-established brand in electronic and electrical component distribution. The company works with 60+ leading IP&E manufacturers and supports major global and regional distributors worldwide through its unique master distribution model,” said Roger Raley, Vice President & General Manager, Waldom Electronics.

Waldom maintains over $600 million in strategic inventory across more than 265,000 SKUs, positioned to support the growth of its global distribution channel.

What differentiates Waldom from other distributors?

Waldom’s differentiation is rooted in its unique business model, channel alignment, inventory visibility, sustainability leadership, and inventory strategy.

Waldom operates a unique, non-competing master distribution model designed to support and strengthen the distribution ecosystem. Rather than selling to end customers, the company works exclusively with other distributors, ensuring complete channel alignment.

By acting as an extension of its supplier partners and a strategic ally to distributors, Waldom adds value without creating channel conflict. This non-competitive approach enables Waldom to reinforce trust, enhance collaboration, and ultimately strengthen and accelerate the growth of the global distribution channel.

Waldom concentrates its stocking strategy on long-tail components that complement, rather than compete with, distributor inventory profiles.

“With more than 265,000 SKUs – many of which are uniquely stocked by Waldom – distributors can offer a broader range of parts without taking on additional inventory risk, enabling them to meet customer demand more effectively,” notes Raley.

Waldom integrates its inventory directly into the ERP systems, websites, and e-commerce platforms of major distributors worldwide. This deep integration generates approximately 17 million inventory views each month across global distributor digital channels. As a result, manufacturers gain expanded reach to end customers through the distribution channel without creating channel conflict, while distributors gain immediate access to inventory they do not stock themselves – significantly expanding their available offering.

Beyond component distribution, Waldom provides a range of programmes designed to remove barriers, expand market reach, and improve supply chain efficiency for manufacturers and distributors.

The company’s model is designed to make components easier to buy while preserving manufacturing efficiency and expanding market reach. By purchasing parts at factory-level minimum order quantities (MOQs) and redistributing them to distributors in smaller, more flexible quantities, Waldom removes traditional ordering barriers and unlocks new sales opportunities. This approach allows manufacturers to maintain efficient production runs while enabling distributors to respond more effectively to customer demand.

Waldom also supports new product introductions by stocking components at launch and offering them to distributors with reduced MOQs, accelerating adoption and lowering barriers to entry across the global market.

Sustainability & environmental commitment

Sustainability is core to Waldom’s operating model. The company powers approximately 80% of its warehouse capacity with solar energy, with solar panels installed across all US facilities, significantly reducing its operational carbon footprint. It also maintains consistent environmental management practices worldwide through ISO 14001 certification across all regions and has been recognised with an EcoVadis Silver rating for its sustainability performance. These achievements reflect a long-standing commitment to responsible operations and continuous environmental improvement.

Central to its sustainability approach is Waldom’s Green Stock programme, established more than 15 years ago, which has prevented over nine billion components from being sent to landfill by recovering value from slow-moving and excess inventory and reintegrating it into the supply chain. Manufacturers and distributors transfer excess stock to Waldom, where it undergoes rigorous quality and inspection processes before being reintegrated into the supply chain.

“This approach minimises waste, recovers value, and gives components a second life to meet ongoing market demand,” said Raley.

To further reinforce its environmental commitment, Waldom plants a tree for every Green Stock order. In just two years, more than 500,000 trees have been planted, making it one of the largest collective tree planting initiatives in the industry.

Market expectations in 2026

Recent supply chain disruptions have reinforced the strength and resilience of Waldom’s business model. By maintaining deep inventory positions in hard-to-source components, the company has been able to support distributors precisely when availability elsewhere tightened. During the COVID period, this approach drove record sales, and more recently, tariff-related volatility led many distributors to slow or pause imports. With hundreds of millions of dollars of inventory already stocked and available in the US, Waldom was well positioned to meet demand and provide continuity of supply.

These experiences are shaping how Waldom prepares for the future. As tariffs evolve from short-term disruptions into a more permanent cost factor, the company is focusing on holding more inventory closer to customers in its EMEA and Asia-Pacific regions. In parallel, Waldom is working to convert its US warehouses into Foreign Trade Zones (FTZs), providing greater flexibility to move product into and out of the US while mitigating tariff impacts and improving regional support.

Looking ahead to 2026, Waldom anticipates a strong demand environment.

“When I look at end-markets, AI and defence really drove the market in 2025. For 2026, in addition to those two, we’re seeing broader industries like consumer and industrial getting back to growth. Couple that with leaner inventory in the supply chain and I believe 2026 could be a record year,” notes Raley.

The company also expects continued acceleration in onshoring and near-shoring as customers seek greater supply chain resilience.

One of the key challenges Waldom sees ahead is the pace of automation and AI adoption. While these technologies offer significant opportunities to modernise and improve business processes, the challenge lies in moving quickly enough to turn innovation into a true competitive advantage – rather than simply keeping pace with the market.

What will the next five years look like for Waldom?

Over the next five years, Waldom sees significant opportunities to further support customers by continuing to invest in automation and artificial intelligence to streamline and modernise processes across the organisation. These initiatives are already underway and are focused on improving efficiency, scalability, and responsiveness as customer and supplier needs continue to evolve.

In parallel, Waldom has been optimising its warehouse infrastructure to maximise space utilisation and support long-term growth. Over the past several years, the company has implemented enhancements such as narrow-aisle racking and increased rack heights to significantly expand storage capacity. These upgrades are nearly complete at the Georgetown, Ohio facility, with similar improvements planned for Rockford, Illinois. With approximately $650 million in inventory today, these investments will enable Waldom to scale toward holding up to $1 billion in inventory, strengthening its ability to support customers during both stable and volatile market conditions.

Waldom is also focused on expanding its market reach and service offering. While the company has traditionally been strongest in electronic components, it has established a growing presence in the electrical and industrial sectors. Expanding and aligning its product portfolio to better serve these markets represents a key growth initiative. At the same time, Waldom plans to accelerate geographic expansion into high-growth regions such as India and Latin America, broadening its global footprint and bringing its model to new customers and partners.

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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Engineers, procurement teams, and hobbyists demand rapid access to a vast range of components, from minuscule resistors to large power supplies, often across multiple projects simultaneously. In this inherently complex environment, distributors face the dual challenges of high Stock Keeping Unit (SKU) diversity and ever-increasing order volumes, and even minor delays or errors can cascade into costly setbacks for customers.

With continuous new product introductions (NPIs) and engineers seeking faster development cycles, the demands on warehouses have never been higher. Furthermore, orders can range from a single reel of resistors to large shipments with dozens of different items, each with unique handling requirements.

To keep pace with evolving market demands, distributors must continuously enhance their distribution operations. By combining robotics, advanced automation, and human expertise, they can better adapt to fluctuating order volumes, diverse SKUs, and tight project timelines, delivering the speed, accuracy, and reliability that customers require.

Continuous automation: scaling with demand

Mouser Electronics serves more than 650,000 customers across 223 countries or territories, supplying over 1.2 million SKUs from 1,200+ manufacturers. To ensure its customer base has reliable access to the latest innovations, Mouser deploys a continuous program of automation investment, integrating new systems to keep pace with growing order volumes and SKU diversity.

Since 2016, a range of new additions have been deployed, each carefully aligned with operational needs, to help enhance throughput, capacity, and service quality. This responsive approach ensures the distribution centre can support rapid NPIs, prototyping, and high-volume production shipments while maintaining accuracy and reliability.

At the core of this evolving system is a mix of advanced technologies, each chosen and scaled to meet specific operational requirements:

• Vertical Lift Modules (VLMs): these goods-to-person (GTP) systems bring components directly to Mouser employees, supporting the efficient picking of small and medium-sized SKUs. To keep up with changing product mixes, VLMs are continually being expanded and modified. Mouser has the largest deployment of these systems, with 187 units in use worldwide (Figure 1)
• AutoStore systems: optimised for medium-velocity items, these modular automated storage units maximise space utilisation while supporting rapid and precise picking. Added in 2021, Mouser’s AutoStore has 76,000 bins, 120 robots, 40 pick ports, and nine replenishment ports
• Perfect Pick AS/RS and sortation loops: designed for order consolidation, these systems streamline the assembly of multi-item shipments, enhancing speed and accuracy while maintaining flexibility
• Advanced packaging and conveyors: automated weighing, print-and-apply, and case-forming systems reduce manual handling and maintain consistency across a wide range of order sizes
• Warehouse control and software integration: custom platforms manage workflows, coordinate robotics, and provide visibility into inventory and order status, enabling the operation to respond in real time to changing order profiles

Mouser’s approach emphasises a continuously evolving system where new technologies are carefully integrated to boost throughput, capacity, and service quality while minimising operational disruption. Over the past decade, the team has consistently refined warehouse operations, optimising packing, order pulling, and consolidation. Just as engineers continually seek new opportunities to innovate and push the boundaries of design, Mouser also pursues continuous improvement in its distribution operations, ensuring that as inventory expands, order complexity increases, or new challenges arise, customers can rely on fast, accurate, and uninterrupted component delivery.

Precision and agility: the human-automation edge

Nevertheless, automation alone cannot solve the complexities of electronics warehousing, and Mouser has built a system that enables humans and machines to work in tandem, allowing for rapid, accurate, and flexible order fulfilment. This synergy enables the company to strike a balance between system optimisation and adaptability, benefiting its customers.

The core principle is that automation accelerates repetitive, high-volume processes, while employees provide oversight, problem-solving, and the flexibility to handle complex or high-value items. Human input is integral to the success of GTP-enhanced systems, and Mouser’s team helps design workstations, refine software interfaces, and optimise workflows, ensuring automation is efficient, ergonomic, and adaptable. Continuous investment in automation, seamless human-machine collaboration, and agile workflows ensure that orders are accurate, fast, and reliable, even in the face of emerging challenges. Whether managing small prototype orders or large multi-item shipments, Mouser’s system supports engineers and supply chain partners with the confidence to explore, iterate, and create without compromise.

The results speak for themselves. When Mouser first added automated packaging and shipping systems around eight years ago, the distribution centre shipped roughly 8,000 orders per day. Today, with the same number of employees, it handles an average of 25,000 orders daily. Many orders can be picked, consolidated, and packaged, and are ready to ship in as little as 15 minutes. Same-day shipping remains near 100% for time-sensitive orders, even as order volumes and SKU diversity continue to grow.

Powering innovation without limits

In industries ranging from automotive and consumer technology to medical devices and industrial automation, engineers and innovators continually push the boundaries of what is possible. Mouser mirrors that energy in its distribution operations, ensuring supply chains never become a bottleneck. Within its cutting-edge 1.5-million-square-foot distribution centre, automation and human skill combine seamlessly to meet the market’s latest demands.

This scale and sophistication allow the company to absorb complexity, maintain accuracy, and respond flexibly to fluctuating order volumes and diverse SKUs. By taking the hassle out of electronics supply, Mouser enables its customers to focus on the work that drives innovation – designing, prototyping, and bringing new products to market.

About the author:

Martina Drimala, VP EMEA Customer Service, Mouser Electronics

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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In 2025, DigiKey had shared a cautiously optimistic outlook, pointing to internal indicators suggesting the worst of the downturn was behind the industry. At the time, some suppliers were sceptical as they weren’t yet seeing the same momentum.

Yet DigiKey’s internal data told a different story. Key metrics – especially customer account growth, order volume, and engineering activity – were all trending upward from mid‑2024 through 2025.

Mike Slater, Vice President of Global Business Development at DigiKey noted that while revenue lagged, the “work” – measured as orders, line items (‘details’), and design activity – was already at record levels.

In hindsight, these indicators proved to be reliable early signals of the recovery and subsequent expansion.

Record growth and a million customers

DigiKey’s performance over the past year was as follows:

• 2025 revenue finished north of $3.9 billion, with double‑digit growth in all three regions
• Europe surpassed $1 billion in revenue for the first time – a milestone DigiKey sees as strategically critical
• DigiKey now serves over one million customers worldwide, and customer count grew about 7.5% last year

What stands out is how central customer count growth is to DigiKey’s strategy. Slater emphasised that even with a million customers, the company believes it is still “just scratching the surface” of its potential customer base.

In Europe alone, DigiKey serves around 200,000+ customers, leaving substantial room for expansion. This year, only a few months in, customer account growth is already in the double digits across all three regions, reinforcing the narrative of strong underlying demand.

A recurring theme was the importance of New Product Introductions (NPIs). Slater made a strong appeal to suppliers in the room to continue investing in new parts and design pipelines and keep feeding the market with innovative components.

The data backs up this emphasis:

• 25% of last year’s customers bought NPI‑related parts
• Under‑100‑piece line items – a proxy for early‑stage design and prototyping activity – have been steadily increasing over the last few years

For DigiKey, this under‑100‑piece segment is a primary indicator of engineering innovation. Rising volumes in this area signal that engineers are actively designing new products, exploring new technologies, and pushing into new markets.

Slater credited supplier partners directly: without their NPIs, DigiKey’s ability to grow its customer base and sustain innovation‑led demand would be significantly diminished.

Market signals: optimism for 2026

Turning to the broader market, Slater described 2026 as a year characterised by cautious but widespread optimism:

• Most customers are planning for mid‑ to high single‑digit growth
• Some verticals – consumer and automotive, in particular – are less optimistic going into the year
• Industrial demand is strengthening, driven heavily by AI and data centre expansion

He illustrated how AI’s impact radiates beyond chips and compute into adjacent sectors. For example: a heating and air conditioning customer reported strong business due to the cooling needs of rapidly expanding data centres.

On the supplier side, the sentiment is similarly positive:

• Suppliers began seeing positive book‑to‑bill ratios in Q3 and Q4 of last year
• A surge in orders placed inside lead time reflects heightened urgency and expectations for faster delivery
• Lead times and prices have generally been increasing, consistent with a tightening, growth‑oriented market

DigiKey’s internal indicators – presented as upward‑sloping graphs – continue to trend “up and to the right,” and Slater emphasised that the line for 2026 is even steeper than what they showed at the same time last year. The message: DigiKey entered 2026 optimistic, and performance to date has exceeded those expectations.

Meeting the needs of customers

DigiKey customers increasingly expect to see real time availability and lead times, to understand clearly when they will receive product if it is not in stock, and to be able to solve problems online without heavy manual intervention. To meet these expectations, DigiKey is pushing for deeper digital integration with suppliers, ensuring clean, timely data flows that keep systems synchronised and customer promises accurate.

Despite legal developments, tariffs remain a fact of life in the business. Slater highlighted DigiKey’s active use of Foreign Trade Zone (FTZ) structures and drawback mechanisms to mitigate costs, along with a strong desire for more suppliers to participate in or align with these FTZ strategies. The overarching goal is to minimise the impact of tariffs on customers, thereby sustaining competitiveness and demand.

As customers increasingly place orders inside traditional lead times, accurate and up to date lead time data has become critical. DigiKey’s planning processes and customer communication rely heavily on this accuracy, and rapid updates from suppliers help the company stay ahead of ordering behaviour and adjust inventory strategies accordingly.

DigiKey has long positioned itself as an inventory driven company, unafraid to stock deeply in order to seed the market. Customers, particularly design engineers working under tight timelines, expect same day shipment and high levels of on hand availability.

The digital engine behind the growth

Tim Carroll, Global Head of Digital Business at DigiKey, explained how the company’s digital platform and marketing engine are powering this growth and strengthening the bridge between suppliers and engineers.

Carroll framed DigiKey as a deeply data driven organisation, both in how it plans inventory and how it goes to market.

Looking into 2026, with more inventory on hand and complex forces like tariffs, compliance, and allocation markets at play, DigiKey is using data from its digital channels to ensure that inventory is both protected and productive. New models predict product stress and, when needed, trigger maximum order quantity limits so that stock is shared across many innovators rather than consumed by a few opportunistic buys. The aim is to ensure that design engineers can continue to access what they need, when they need it.

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Today the environment is different. OEMs and EMS providers build in one region, service in another, engineer in a third, and expect continuity across all of them. Customers evaluate suppliers not by territorial boundaries but by whether supply arrives on time. Manufacturers are judged by their ability to support global demand, including service and field requirements. Procurement teams are measured on continuity, compliance, and total cost, not on whether they stayed inside traditional channel definitions.

This shift has exposed the fundamental limitation of a product and territory centred view of distribution. In modern supply chains, the real differentiator is not what a distributor is authorised to sell but whether they can solve sourcing problems when the expected path breaks down. A distributor who can only say yes when the exact product, in the exact package, in the exact region, happens to be sitting in the authorised stockroom is no longer sufficient. The market now rewards distributors who can see the entire supply landscape, interpret conditions in real time, and adapt sourcing strategies without compromising documentation or traceability.

This is where companies that operate across multiple sourcing channels have an advantage. IBS Electronics is a clear example of this model. IBS supports manufacturers and customers through a franchise channel for full alignment and design in engagement, an authorised supply platform for procurement consolidation and compliance, and a vetted independent sourcing channel for situations where availability, geography, or allocation disrupt authorised pathways. This multi-channel architecture allows IBS to participate in design, support production, and maintain service continuity across global programmes rather than being confined to a single role.

This type of data driven sourcing philosophy recognises that availability is not a static condition. It fluctuates based on allocation, regional demand spikes, long term service requirements, and shifts in lifecycle planning. A distributor that prioritises sourcing and supply chain management ahead of static product line ownership is better equipped to support both manufacturers and their customers. The emphasis moves from asking what am I authorised to sell to what must be done to maintain continuity for the customer and support the manufacturer’s programme.

A modern sourcing model must therefore operate across multiple controlled channels. In a stable environment, the franchised channel should support design in, stocking strategies, lifecycle visibility, and roadmap alignment. This is the ideal state for both manufacturers and customers, because it offers clarity and mutual alignment.

Real supply chains, however, do not always remain in stable environments. Lead times can extend without warning. Allocations can emerge rapidly. Regional supply imbalances can leave one geography short while another holds excess. Service organisations often need small quantities immediately, long after authorised channels have deprioritised older components. When these situations arise, a single channel distribution model creates unnecessary risk.

Authorised sourcing pathways, including indirect authorised supply through contracted partners, offer a secondary stabilising layer. They support consolidation, reduce supplier fragmentation for OEMs and EMS providers, and allow documentation and compliance to remain intact. But even authorised aggregation cannot always keep pace with real time field demand or geographic restrictions.

This is where responsible independent sourcing plays an essential role in a functioning supply chain. Independent channels are not inherently risky or unstructured. When vetted, documented, and governed, they act as a pressure release valve for manufacturers and customers. They allow supply to move globally when regional segmentation blocks it. They allow production to continue when allocations limit authorised availability. They allow service organisations to fulfil obligations long after a line has reached end of life.

What matters is not authorisation status. What matters is documentation, chain of custody, testing and inspection capability, export compliance, and alignment with manufacturer standards. A sourcing pathway that can deliver those attributes is not a last resort. It is an essential part of supply chain resilience.

The uncomfortable truth is that the electronics industry often tolerates outcomes that are not acceptable in any other modern system. A manufacturer in the Americas or Europe may be told that a production line must stop because inventory is located in Asia and cannot be accessed under current channel rules. This may satisfy channel compliance requirements, but it does not satisfy customer expectations or support the manufacturer’s brand. The fact that a compliant, traceable part exists in the global system should matter more than the territorial boundaries that prevent it from moving.

The question the industry should be asking is not whether a sourcing path is authorised or unauthorised. The question is whether there is a structured, documented, and compliant way to solve the problem. When that question becomes the standard, supply chain partnership becomes the priority and channel definitions become tools rather than constraints.

The distributors who will earn the most respect over the next decade are the ones who adopt this problem-solving mindset as their operating philosophy. They will treat authorised, partner authorised, and independent sourcing as coordinated tools that can be applied based on the situation. They will use data to determine which channel is appropriate at a given moment. They will document their actions, so procurement and quality teams have full visibility. Most importantly, they will refuse to respond to critical demand signals with declarations that no solution exists when solutions clearly do.

The electronics ecosystem does not need more catalogue holders. It needs problem solvers who understand that the mission is to support the manufacturer’s customer. When a distributor places that outcome at the centre of their model, respect follows naturally from manufacturers, procurement teams, and the market itself.

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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For more than half a century, the country has been an understated pillar of the global semiconductor supply chain.

Long known for its strengths in computer chip assembly, packaging, and testing, the country has quietly enabled the electronics industry worldwide.

Today, as Washington and Beijing jostle for market domination, the quiet truth is that 13% of the world’s computer chips are packaged in the country.

Now, the country is at a pivotal moment as it attempts to establish itself in activities further up the semiconductor value chain like chip design and AI just as geopolitical tensions and shifting trade policies reshape the world as we know it.

Panang: curry and chips

Malaysia started producing semiconductors in the early 1970s after the government set up a free trade zone close to the village of Banyan Lepas on the southern tip of the island of Panang and invited US and German companies to build assembly plants on what had been paddy fields.

The move attracted tech giants such as Intel, Advanced Micro Devices (AMD), and National Semiconductor which at the time were looking for stable, cost-effective locations to support the rapid expansion of global chip production. Panang quickly became known in the industry as ‘Silicon Island.’

Over the following decades, Malaysia built a dense industrial ecosystem encompassing suppliers, subcontractors, logistics providers, and a skilled engineering workforce.

By the 1980s and 1990s, semiconductor manufacturing had become a cornerstone of the country’s export-led growth model. Rather than competing in capital-intensive, leading-edge wafer fabrication, Malaysia specialised in back-end manufacturing, steadily moving from basic assembly into increasingly complex packaging and testing operations.

Intel has committed billions of dollars to strengthen its advanced packaging operations in Penang, while Infineon has expanded its Kulim facility to support rising demand for power devices used in electric vehicles, renewable energy systems, and industrial applications.

NXP, which has operated in Malaysia for more than 50 years, continues to focus on advanced assembly and packaging, particularly for automotive electronics, secure payment systems, and IoT solutions.

Overseas investment also spawned a burgeoning domestic economy as local engineers, trained at the multinationals, went on to set up their own companies.

Unisem and Inari Amertron have built strong positions in assembly, testing, and radio frequency devices, while Vitrox has gained recognition as a manufacturer of semiconductor inspection and automation equipment.

Penang-based Infinecs has emerged as a notable example of Malaysia’s growing ambitions in integrated circuit and system-on-chip design, serving applications in AI, 5G, and advanced computing.

In 2019, Malaysia saw another wave of overseas investment as Western companies such as Micron and Jabil, which have extensive manufacturing operations in China, relocated at least some operations to southeast Asia under the threat of US trade tariffs on Chinese manufactured goods.

Up, up and Malay(sia)

Malaysia’s strengths increasingly lie in advanced packaging and power semiconductor manufacturing, areas that are becoming more strategically important as the industry seeks alternatives to traditional scaling. Technologies such as system-in-package, wafer-level packaging, and multi-die integration are now central to many Malaysian operations, enabling performance improvements without relying solely on smaller process nodes.

The country has also become an important base for wide-bandgap semiconductors, particularly silicon carbide and gallium nitride. These materials are critical for next-generation power electronics, supporting higher efficiency and smaller form factors in electric vehicles, charging infrastructure, and renewable energy systems. With global demand accelerating, Malaysia’s established manufacturing expertise positions it well to capture further growth.

Manufacturers are also investing heavily in automation, robotics, and AI-driven manufacturing processes. These technologies are being deployed to improve yields, manage rising costs, and support increasingly complex products. Industry leaders have been clear that productivity improvements will be essential for maintaining global competitiveness, particularly as cost pressures and policy uncertainty increase.

Malaysia’s latest phase of semiconductor development is being shaped by its National Semiconductor Strategy (NSS), launched in May 2024.

The strategy aims to strengthen the country’s position across the value chain, with a particular focus on chip design, advanced packaging, manufacturing equipment, and talent development.

Under the plan, Malaysia is targeting the creation of 10 domestic semiconductor companies with annual revenues exceeding $1 billion, alongside a broader base of firms approaching that scale.

Speaking at the Asean Semiconductor Summit 2025, a year after the initiative was launched, Prime Minister Datuk Seri Anwar Ibrahim said that under the initiative, the country had so far secured RM63 billion (S$15.5 billion) worth of semiconductor investments.

These include a move by Infineon to open the world’s largest 200mm silicon carbide power fab in Kulim; Syntiant’s MEMS microphone and sensor operations; as well as Plexus’ manufacture and re-manufacture of printed circuit boards.

“15 years from now, we want Malaysia to be able to look back at this moment as the tipping point when the country began grooming its very own Fortune 500 tech companies,” Anwar said.
Another key element of the NSS is a strategic partnership with ARM Holdings.

Under the agreement, Malaysia will invest $250 million over 10 years to access advanced chip design blueprints and train 10,000 local engineers. The move is intended to accelerate Malaysia’s transition from a production-focused hub to a participant in higher-value semiconductor activities, particularly intellectual property development and design enablement.

ASEAN-able limits

Yet, despite this, Malaysia still faces a number of hurdles in its quest to move up the value chain.

Malaysia faces hurdles in areas such as long-term research funding, venture capital availability, and talent retention.

Brain drain continues to be a concern, with skilled engineers often drawn to higher-paying opportunities in the West or in regional competitors such as Taiwan, South Korea, and China.

As a result, many observers expect Malaysia to focus initially on licensed and customised designs rather than fully independent, cutting-edge innovation.

Another issue at the moment is increasing global uncertainty. In recent months, companies have adopted a cautious stance as they await clarity on potential US tariffs affecting semiconductor-related trade. With the US representing Malaysia’s third-largest market for semiconductor exports, any shift in trade policy could have a material impact on investment decisions.

As global supply chains continue to diversify, Malaysia’s willingness to engage with both Western and Asian markets has made it an attractive ‘neutral’ manufacturing location. While it is not seeking to compete with the most advanced fabrication hubs, Malaysia’s focus on legacy chips, advanced packaging, power devices, and design support reflects a pragmatic strategy to move up the value chain without overextending.

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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Prices are rising by 5-15%, and lead times from manufacturers for standard products such as MCUs have already reached 23 weeks in certain circumstances. And this was already the status prior to the recent events in the Middle East, which are likely to compound and exacerbate the situation.

“We are hoping that it won’t return to the disruption experienced in 2020-2022 when customers without forward orders found themselves paying extreme premiums on the grey market simply to keep production running,” says John Bowman, Anglia’s Marketing Director. “But already, some memory manufacturers have closed their books for new orders this year, and across the board, our manufacturing partners are quoting progressively longer lead-times. You have to learn from history, and I am highly certain we are heading towards a period of restricted supply in the very near future.”

With more than 50 years of experience navigating market cycles, Anglia is advising customers to place orders early to secure their required production volumes. Bowman continues: “Customers need to take measured action now and lay down their component requirements for at least the next 12 months. Now is most certainly not the time to sit back and wait – as Theodore Roosevelt once said: ‘… the worst thing you can do is nothing’ .”

As manufacturer and distribution inventories tighten and die banks are drawn down, goods ordered today are likely to have a lead time of six months or longer. But that is much better than being told that there is no availability and no chance of getting the parts you need, other than falling back on the grey market. Anglia are ready to work with every customer, large and small, to manage the challenges ahead.

Bowman concludes: “We have a reputation as the eyes and ears for SMEs. We are trusted to work with them through challenging times and help mitigate risks to their production. But it’s vital that our message is taken seriously – recent years should not create a false sense of security. Purchasing strategies need to adapt, and the time for action is now.”

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As a part of the agreement, Farnell will distribute and market Same Sky’s extensive product portfolio, including audio, interconnect, thermal management, and more. In addition to product support through the Farnell brand in EMEA, Same Sky’s parts will also be available through the Newark brand in North America and the element14 brand in the Asia Pacific.

With over 80 years of experience and operations in 60 countries, Farnell offers over 950,000 products covering 2,000 manufacturer brands and supplying over two million customer contacts in more than 150 global industries. Farnell has been a part of the Avnet brand since its acquisition in October 2016.

“This partnership with Farnell strengthens Same Sky’s commitment to expanding regional distribution, inventory availability, and local support for customers across Europe, Asia, and the Americas,” said Dave Carroll, Vice President of Product Management at Same Sky. “By working closely with one of the industry’s leading high-service distributors, we’re improving access to Same Sky solutions and helping engineers move from design-in to production with greater speed and confidence.”

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Unfortunately, 2025 wasn’t an aberration – 2024 was. Shortages and other disruptive events are occurring more frequently in recent years, and the ongoing geopolitical tensions are only raising the likelihood of that trend continuing. If procurement teams stick with their previous sourcing strategies, they will have to continue to chase down parts whenever the market dictates it.

This isn’t a sustainable strategy for success. As your procurement team finalizes its plans for 2026, you need to build with flexibility in mind so you can adjust whenever the next disruption occurs.

Abnormal is the new normal

2025 was a chaotic year defined by the various shortages that disrupted procurement across the industry, and those shortages don’t seem to be ending as the calendar turns to 2026. The Nexperia situation remains unresolved, with orders placed in the final quarter of 2025 and later facing delays and shortfall; the DDR4 shortage has continued to drive prices skyward; and to top it off, the explosion of AI and data centre needs is now putting a heavy strain on DDR5 supply.

This continues the broader trend of the rise of shortages. More than half of the major shortages in the 21st century have occurred in the past decade, with six in the past five years alone. That represents a significant jump from the previous decade, when there were only four shortages in total.

Beyond the increase in frequency, shortages are also becoming more disruptive. The shortage affecting automotive PMICs, MCUs, and MOSFETs lasted four years; the two affecting ICs, MLCCs, and CPUs lasted three years each. These shortages weren’t short-term random occurrences; they were extended disruptions that affected large swaths of the industry for a significant amount of time.

Moreover, shortages are increasing in severity. 2025 saw an increase of more than 800% in 16GB DDR4 RDIMM prices and a price increase of more than 700% for Nexperia products amidst the ongoing shortages. Compare that to shortages in previous years, such as the mere 75% increase in price DRAM saw during its shortage in 2014 or the 80% price increase for NOR flash in 2005. The price jumps fluctuate for various reasons beyond just when they occur – ICs and capacitors tend to see a larger increase in price during shortages than commodities, for example – but we have consistently seen greater price jumps in recent years as shortages have become more impactful on the market.

Account for disruptions before they arise

As you finalise your plans for 2026, build safeguards into your procurement strategies to protect against these potential impacts on your manufacturing processes. Authorised distributors are great options for long-term procurement, but the geographical and resale restrictions placed upon them by the manufacturers they work with hamper their ability to source parts on the open market. Independent distributors, by contrast, have the broad industry knowledge and global flexibility to secure critical parts during difficult market conditions.

Without the restrictions from manufacturers, independent distributors can access a greater range of parts on the open market. Unique service offerings, such as buying excess inventory for resale, create opportunities for alternative sourcing channels not available to authorised distributors. The global reach of the top-tier independent distributors grants them the ability to buy and ship parts from anywhere in the world, allowing your supply chain to continue moving when parts are hard to find. The more avenues available, the more likely it is you get the right parts at the best price possible – without a 26-week lead time.

Even outside of shortages, working closely with an independent distributor will help you anticipate potential disruptions and prepare before they arrive. While authorised distributors have a deep well of knowledge of the specific manufacturers they work with, the wide scope of independent distributors’ dealings across the industry provides a lens into broader market conditions at any given moment. The secondary market is often at the forefront of industry disruptions, sensing the headwinds before shortages begin in earnest. The earlier your team can see the problem, the easier and more cost-effective it will be to prepare for its effects.

Build strong distributor relationships before volatility strikes

Simply having an independent distributor in the plans in case of a procurement emergency isn’t enough as these emergencies become more commonplace. Strong relationships solve problems in this industry, especially in times of shortage. The best time to build that relationship with an independent distributor is before you truly need it.

Whenever the next shortage comes in 2026, you will want to be prepared with the right resources and market insights before it affects your manufacturing schedule. The more knowledge and sourcing channels you develop now, the better prepared you’ll be when the inevitable happens.

You can’t expect the unexpected, but you can prepare for it. In this time of constant volatility in the market, the best time to prepare is now.

About the author:

Todd Snow, Chief Procurement Officer, Smith

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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For engineers and procurement teams, reliable access to bread-and-butter components can make or break a production line and have expensive consequences when unobtainable parts impact long-term programmes.

1. Buffer inventory burn-off – the manufacturing and supply chain issues underlying the COVID-19 pandemic prompted companies to stockpile essential components, muting demand for the past several quarters. While creating a sense of stability, the inevitable drawdown of that inventory may catch original equipment manufacturers (OEMs) off guard when it comes time to procure parts that are no longer in abundance on their own shelves or in supplier and distributor warehouses. In the notoriously cyclical semiconductor industry, an ounce of prevention is worth a pound of cure. Keeping a sharp eye on current stores and future availability will be an essential task for procurement teams in the new year
2. Normalisation in Europe – inventory stockpiles are being whittled away across industries, but the rate varies by region. On balance, Europe’s economy rests on mature, steadfast sectors such as the industrial and automotive sectors. The demand curve tends to lag North America and the Asia Pacific because the equipment in those industries tends to have a longer product life. Nonetheless, book-to-bill ratios are rising. The European Semiconductor Industry Association is forecasting 5.6% growth in semiconductor revenue in Europe in 2026, with sustained demand for the next two years. Logic and memory devices are leading the way. Other product categories will recover gradually
3. Accelerating component lifecycles – the speed of innovation is driving original component manufacturers (OCMs) to accelerate product obsolescence as the thirst for AI influences electronic components across the spectrum. Whether they’re advancing portfolios to remain competitive, shedding duplicative products after an acquisition, or the fabs they work with are retooling for iterative form factors, the tendency to focus investment on promising technologies with higher profit margins directly impacts the availability of parts already in market. Last-time buy windows of 12 to 24 months can fall victim to more pressing business concerns, leaving customers without a good solution for acquiring the critical parts they anticipate needing well beyond the cut-off date. Deploying the latest AI-driven forecasting tools and keeping abreast of manufacturer timelines is an absolute must
4. Embracing manufacturing services – the price of obsolescence is often underestimated, but acute need has a way of sharpening the senses. The ramifications of stalled production reverberate beyond the balance sheet as delivery and field deployment timelines are impacted. In heavily regulated industries, the cost of equipment redesign, testing and recertification ranges from prohibitive to astronomical. While this obviously affects OEMs, self-inflicted damage is a risk for OCMs that chase the next big thing at the expense of current customer needs. Licensing authorised partners to produce EOL components on the OCM’s behalf – components that are identical in form, fit and function – avoids unnecessarily irritating those who pay the bills

Prescience, not panic

Obsolescence management is a discipline that spans the entire equipment lifecycle, from design through disposition – and it is a discipline that stands apart from engineering and procurement alone. During the design phase, qualifying components through the lens of inevitable obsolescence complements performance and functionality assessments, serving to mitigate accessibility issues down the road. As programs extend, close ties to OCMs can help OEMs keep track of impending part change notifications (PCNs) and give them the runway they need to implement Plan B. On the back end, working with a specialty distributor that can still provide authorised parts that have reached EOL status, is strategy that avoids the risk of the gray market. Woven throughout it all is a resilient supply chain able to shift seamlessly when disruption looms. Environmental and social compliance concerns are a part of the equation, too.

Collaboration between OCMs, OEMs, and their supply chain partners is the only way to stay ahead of fast-moving technology without negatively impacting project schedules and programme budgets, especially when legacy equipment is engineered to last decades longer than the parts that comprise it. Make the time. Make the investment necessary to lower risk. In an industry as volatile and innovation hungry as technology, a prescient, proactive approach to risk mitigation is the difference between profitability and panic.

About the author:

Bill Bradford, President of Flip Electronics

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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The expanded facility underscores strong lender confidence in NewPower Worldwide’s operational excellence, financial discipline, and ability to move decisively in rapidly shifting global markets.

“This expanded credit facility gives us the financial flexibility to execute deals of any scale at the pace our customers require,” said Carleton Dufoe, Chief Executive Officer of NewPower Worldwide. “Our customers need partners who can move fast, adapt to change, and deliver consistent results. This additional capacity ensures we can meet those demands every time.”

“Our continued partnership with NewPower reflects our confidence in their ability to support customers through dynamic market conditions,” said Jason Upham, Senior Vice President at Citizens. “Our team led a new credit facility that will give NewPower the agility and resources needed to deliver solutions that align with their customer’s supply goals and timing.”

This increased capacity provides NewPower Worldwide the financial strength and flexibility to execute deals of any size with speed and consistency. It enables the company to align seamlessly with its customers’ pace, delivering tailored supply solutions that help them maintain stability, adapt quickly to market changes, and move forward with confidence.

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Power sourcing and power management devices are fundamental to virtually every electronic system, supporting applications that range from ultra-low power designs to high-efficiency, high-voltage and high-current requirements. Over time, power supply architectures have evolved significantly to meet growing demands for efficiency, reliability and increasingly stringent safety standards. As a result, most designs combine application-optimised controllers and power management devices with a wide range of multi-sourced discrete components.

Once validated, these designs are rarely short-lived. Customers frequently implement a base power design across an entire product family, introducing only minor variations to maintain a consistent bill of materials. In sectors such as medical, industrial, defence and automotive, designs must also meet strict safety approvals defined by organisations including UL, VDE, TÜV, CSA, BSI and standards such as IEC 60950 or IEC 62368-1. Given the time, cost and complexity involved in achieving these approvals, customers are understandably motivated to maintain proven designs over long periods and avoid redesigns or requalification wherever possible.

However, ongoing supply chain disruption and constrained semiconductor availability continue to challenge this approach. Power and power management devices have been particularly affected. Whether a design relies on a sole-source controller or a multi-sourced transistor, lead times are frequently extended and, in some cases, exceed 52 weeks. To mitigate risk, customers are expanding approved supplier lists, broadening acceptable temperature and performance grades, and increasingly becoming open to a wider range of acceptable date codes, often at increased cost.

Even with these measures, maintaining continuity for mature or long-life designs remains difficult without access to authorised end-of-life inventory. This is where long-term lifecycle support becomes critical.

Through established partnerships with leading semiconductor manufacturers, Rochester Electronics provides access to a broad portfolio of both active and end-of-life power-related devices. The current offering includes more than five billion units, with over 33% of available inventory carrying lead times greater than 20 weeks. Rochester’s power and power management portfolio spans products from industry-leading suppliers including Texas Instruments, onsemi, Analog Devices and Maxim Integrated, Infineon Technologies, Renesas, NXP, and Nexperia.

All devices supplied by Rochester are 100% authorised, fully traceable, certified, and guaranteed. By providing assured access to hard-to-find and discontinued components, Rochester enables customers to sustain production, protect approved designs and power systems reliably well beyond original end-of-life timelines.

For more information visit – www.rocelec.com

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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Bel acquired dataMate for $16 million, including $1 million of deferred consideration. With annual sales of approximately $18 million and operating margins in line with Bel’s corporate averages, the dataMate acquisition is expected to be immediately accretive to Bel’s financials.

This transaction expands Bel’s portfolio and positions the company for accelerated growth in high-demand markets, including networking, data centres, industrial automation, smart building management, and broadband deployment. The acquisition of dataMate brings a portfolio of complementary products that align well with Bel’s existing Magnetic Solutions offerings, broadening the company’s reach in Ethernet and broadband solutions and expanding its base sales without overlapping customer design needs. Additionally, dataMate’s ongoing technology development offers potential for future growth, with innovations intended to deliver both data and power through a single pair of wires, streamlining network infrastructure and reducing costs for industrial and smart building applications.

Beyond product and market expansion, the acquisition brings expansion to Bel’s US-based manufacturing capabilities, including R&D, sales, and product management functions.

Joe Berry, President of the Magnetics Division at Bel, commented: “The acquisition of dataMate is expected to expand Bel’s leadership in networking solutions. The innovative technologies and talented engineering team will enable Bel to deliver even greater value to our customers and accelerate growth in key markets. We look forward to welcoming the dataMate team and building on their impressive legacy.”

The initial consideration of $15 million was funded with a combination of cash on hand and borrowings from the company’s existing revolving credit facility.

Northland Capital Markets acted as financial advisor to Bel in this transaction. Katten Muchin Rosenman served as legal advisor to Bel in this transaction.

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Rather than treating lead time extensions as a blanket signal of shortage, they should be understood as indicators of risk – sometimes systemic, sometimes category-specific, and sometimes isolated to individual manufacturers. Read correctly, lead time data like that present in Avnet Silica’s quarterly Trendliner reports becomes a planning tool rather than a source of uncertainty.

Systemic signals: what NAND volatility reveals

The behaviour of NAND flash over the past year provides a clear example of systemic stress as opposed to transient disruption. Demand for these products recovered through 2024 and accelerated in 2025, driven by data centre investment, AI infrastructure, and storage-intensive applications. The consequent extension of lead times for NAND devices was not the result of panic buying or sudden supply failure, but rather an indication of a market where capacity had been deliberately constrained during the previous downturn.

NAND manufacturing is capital intensive, geographically concentrated, and highly sensitive to utilisation rates. When demand rebounds, capacity cannot be restored overnight. In this context, longer lead times are a structural signal, reflecting the physical restrictions and economics of the supply base, not temporary inefficiency.

For buyers, the lesson is that diversification and buffer inventory are not defensive reactions but strategic assets. Where capacity is concentrated and elasticity is low, reliance on minimal inventory magnifies exposure. Lead time expansion in NAND has therefore been a predictable outcome of broader market dynamics, reinforcing the need for procurement strategies that recognise structural risk early.

Strategic stocking in practice: the SRAM case

If NAND illustrates systemic pressure, SRAM demonstrates how early trend recognition can materially reduce impact. During the first half of 2025, SRAM lead times began to lengthen gradually, moving from a historically stable range of two to eight weeks toward double-digit territory. By Q4, many lines had extended to 16 weeks or more (Figure 1).

What is notable is not the expansion itself, but its visibility. The Trendliner data showed the inflexion well before lead times became operationally disruptive. Buyers tracking Q2 and early Q3 signals had a potential opportunity to adjust stocking strategies, secure allocation, or qualify alternates before the market tightened further.

This is the core shift in modern supply-chain resilience: moving from reactive mitigation to anticipatory planning. Strategic stocking, informed by trend indicators rather than headlines, allows organisations to absorb volatility without resorting to emergency procurement or excessive premiums. In this context, increasing inventories is a valid optimisation strategy, rather than an indicator of inefficiency.

Separating market stress from manufacturer risk

A critical skill in this environment is distinguishing between broad market pressure and manufacturer-specific constraints. Not all lead time extensions carry the same implications. Some reflect genuine capacity strain across an entire category; others point to supplier concentration, portfolio gaps, or operational disruption at individual vendors.

The 2024-2025 data shows increasing divergence between suppliers within the same component families. In some cases, comparable parts exhibited sharply different availability profiles, indicating that risk was not evenly distributed. Buyers who treat all lead time changes as market-wide signals risk missing these nuances.

This is where comparative analysis becomes essential. Understanding how lead times move relative to peers allows procurement teams to identify when diversification, redesign, or supplier substitution can meaningfully reduce exposure. Seen this way, lead time volatility becomes a diagnostic signal rather than a simple warning.

A constructive outlook: capacity investment as the release valve

While short-term volatility has increased, the medium-term outlook is notably more positive (Figure 2). Investment data points to a renewed expansion cycle, with semiconductor capital spending projected to rise by approximately 6.1% in 2026. Importantly, this investment is not limited to incremental capacity increases but is increasingly directed toward localised and regional manufacturing.

Figure 2. While short-term volatility has increased, the medium-term outlook is notably more positive 

These developments suggest that current lead time pressures are not permanent constraints but transitional ones. New facilities, once online, will improve supply elasticity and reduce geographic concentration risk. However, the lag between investment commitment and operational output means that 2025 remains a bridge period.

In this context, inventory investment today serves a strategic purpose: it bridges the gap between constrained supply and future resilience. Rather than signalling pessimism, disciplined stocking reflects confidence that today’s volatility will be resolved by tomorrow’s capacity.

Summary: from uncertainty to advantage

The evolution of Just-in-Time strategies does not mean abandoning efficiency; it means redefining it. Lead times are no longer just delivery metrics – they are signals of where risk resides and where planning must adapt. Buyers who learn to interpret these signals, differentiate their causes, and early action can turn volatility into a competitive advantage.

Seen this way, the data from 2024 and 2025 makes one point clear for 2026 and beyond: resilience is not built by predicting the next disruption, but by recognising structural patterns as they emerge. Strategies such as building close distributor relationships and Avnet Silica’s Trendliner support this shift in mindset, enabling buyers to move from reacting to shortages to managing risk with intent. Ultimately, it can be the difference between being positioned not just to endure market cycles, but to navigate them with confidence.

About the author:

Thomas Foj, Vice President Supplier Management, Solutions & Digitalisation EMEA, Avnet Silica

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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In 2025, the impact of tariffs was distributed throughout the entire component stack. We expect that the situation will continue, subject to any agreements between the US government and individual countries. As of the time of writing, tariffs apply not only to standalone chips but also to populated boards and subassemblies that include them. A combined rate of 35% or more applies to industrial HMIs, drive control boards, safety I/O modules, and communication cards fabricated in China.

Power ICs, discretes, and all semiconductors faced significant impacts due to the 50% Section 301 tariff, which applies broadly to the entire semiconductor portfolio when China is the country of origin (either fabbed or packaged there). This includes voltage regulators, gate drivers, MOSFETs, memory, MCUs, sensors, analog ICs, and mixed-signal devices, all of which share the same duty burden. For industrial drives and servo systems, where the power stage is a significant cost element, this pushed tariffs into double-digit percentages of the overall bill of materials (BOM), forcing OEMs to either raise prices or sacrifice margins. When Chinese manufacturers delivered these devices inside assembled power modules or complete drives, the tariff load compounded across both the semiconductor and assembly levels.

Electric equipment and sectors adjacent to the grid face challenges due to multiple tariffs. The duty on switchgear, transformers, and other hardware from China ranges from 7.5 to 25% before factoring in semiconductors. The cost of importing a complete industrial UPS, motor starter, or advanced protection relay could increase by 15-30% relative to pre-tariff baselines, as 50% tariffs imposed on Chinese semiconductors and higher rates apply to PCB assemblies. Utility companies and large industrial companies that purchase such equipment under multiyear contracts suddenly face project cost increases that they cannot always pass on to end users.

A visible response emerged from companies in 2025. ABB and Siemens, major industrial automation suppliers, began evaluating nearshoring power electronic assembly to Mexico and Eastern Europe, both tariff-favoured jurisdictions under the United States-Mexico-Canada Agreement (USMCA). TI and Infineon, suppliers of microcontrollers, power ICs, and drivers for industrial applications, announced capacity expansions in the US and allied countries, though meaningful production is still years away. EMS providers – Flex and Celestica have relocated portions of PCB and power module assembly from China to Vietnam, Thailand, and Mexico to mitigate tariff exposure.

Underlying these tactical moves is a fundamental geopolitical reorientation influencing longer-term strategy. Countries globally view semiconductor and critical-material supply chains as strategic infrastructure. The US government launched the ‘Pax Silica’ alliance to secure these supply chains and reduce dependence on any single hostile actor. Venezuela’s geopolitical shifts and potential access to rare-earth minerals highlight that supply chain realignment involves geopolitical control and national security as much as economics.

For industrial semiconductor procurement, this has two immediate implications. First, tariff-advantaged jurisdictions such as Mexico, Vietnam, and Thailand receive explicit government support and investment, enhancing their credibility as long-term sourcing bases. Second, suppliers aligning with US priorities around ‘Pax Silica’ and critical minerals security can qualify for grants, tax incentives, or preferential contract treatment for defence-adjacent or critical infrastructure projects.

Geopolitical pressures and government initiatives have driven companies to diversify sourcing and invest in resilient supply chains – STMicroelectronics and onsemi exemplify this shift with strategic capacity expansions. In 2025, ST announced plans to scale its Agrate, Italy, fab into a high-volume site for smart-power and mixed-signal technologies, targeting 4,000 wafers per week by 2027, with potential expansion to 14,000 wafers per week. Concurrently, ST expanded its Crolles, France fab for MCU production and advanced MEMS sensors in Singapore. These moves position ST as a key supplier of MCUs, power ICs, and sensors, offering non-China sourcing options for industrial and automotive OEMs.

Onsemi has similarly focused on vertically integrated power solutions, with a $1.91 billion (€1.64 billion) investment in a silicon-carbide (SiC) fab in the Czech Republic, supported by $524 million (€450 million) in state aid. This facility, operational by 2027, will produce SiC devices for EVs and industrial applications, aligning with the EU’s supply chain resilience goals. Meanwhile, Renesas and NXP are also adapting to tariff and geopolitical pressures. Renesas expanded 28nm MCU production in Japan and Europe to reduce reliance on China, while NXP partnered with Vanguard to build a $7.8 billion fab in Singapore, targeting mixed-signal and power-management ICs. These efforts reflect a broader industry realignment toward tariff-advantaged, geopolitically secure manufacturing hubs.

In 2025, OEMs re-evaluated suppliers, finding Chinese lower-cost options unattractive due to tariffs and conflicts with emerging government supply chain strategies shaping investment and incentives. The broader narrative is now clear: in 2026, industrial buyers will seek suppliers and geographies aligned with government strategies, including ‘Pax Silica’, critical minerals security, and regional allies. TI, Siemens, and ABB are investing in Mexico, Southeast Asia, and allied nations to mitigate tariff and geopolitical risks.

For procurement professionals in the industrial sector, the lesson is clear: tariff exposure spans all semiconductors, particularly when China is involved. The practical response includes mapping China-origin components and identifying tariff-advantaged alternatives from suppliers such as Renesas (Japan and Europe), NXP (Singapore VSMC), STMicroelectronics (Europe and Singapore), and onsemi (US, Europe, and the Czech Republic). Supplier selection now involves geopolitical and economic considerations. Companies aligning sourcing with government initiatives may gain better pricing, improved availability, and access to incentives that offset short-term costs. In 2026, semiconductor sourcing will no longer focus solely on securing parts at competitive prices but will require building supply chains aligned with securing critical industrial infrastructure.

About the authors:

Saloni Gankar, Senior Analyst, Industrial Semiconductors & Paul Pickering, Research Director, Semiconductors, Omdia

This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.

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“Remaining successful in the semiconductor memory market for 35 years is anything but a given,” says Marco Mezger, Global President of MEMPHIS Electronic. “This market is extremely volatile and subject to constant change. MEMPHIS’s long-term success is the result of our clear focus on memory technologies, our technical expertise, and the close, long-standing partnerships we maintain with customers and manufacturers.”

Since its founding in 1991, MEMPHIS Electronic has continuously evolved from a traditional distributor into an internationally recognised Memory Competence Center. While the semiconductor memory market has undergone fundamental changes, MEMPHIS has remained committed to its core mission: supporting customers in selecting, qualifying, and ensuring long-term availability of memory components throughout the product lifecycle.

The memory market poses specific challenges for companies. Product discontinuations, technology transitions, and highly fluctuating availability and pricing have been inherent characteristics of the market for decades. MEMPHIS capitalises on these market conditions with a consistent specialisation in memory technologies, an exceptionally broad portfolio covering products from more than 18 memory manufacturers, and a deep understanding of both technology and market dynamics. This enables the company to identify alternatives, mitigate supply-chain risks, and provide long-term planning security.

A key success factor is the combination of in-depth technical expertise, market transparency, and an exclusive focus on memory products for long-life industrial and embedded applications. MEMPHIS supports its customers not only in component sourcing, but also in second-source strategies, lifecycle management, and the assessment of technological developments – capabilities that are becoming increasingly important for customers.

For MEMPHIS, this anniversary is a reason and an opportunity to look ahead. The growing complexity of modern memory technologies, increasing requirements for availability and longevity, and the rising importance of memory solutions will continue to require the memory competence that the MEMPHIS team provides to customers and will continue to shape the company’s future development.

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The current environment does not mirror the severe disruption experienced between 2020 and 2022. Still, the early signals are familiar enough to warrant reflection. The question procurement organisations should be asking is not whether demand will rise, but whether supply chains are truly better prepared to absorb it.

Over the past several years, procurement teams have been forced to adapt under pressure. Decisions that once unfolded over quarters were compressed into weeks or days. Supplier relationships were stress-tested. Inventory strategies were reevaluated. In many organisations, procurement moved from an operational function to a central pillar of business continuity.

Progress has followed. At the same time, resilience remains uneven.

Progress has been made, but it is not universal

There is no question that the industry is better equipped than it was five years ago. Visibility tools are more widely deployed, and data-driven procurement has moved from aspiration to expectation. Multi-region sourcing is now common practice rather than an exception. Strategic inventory planning has regained credibility at the executive level.

Yet adoption varies widely. Some organisations have embedded real-time supply chain intelligence into daily decision-making. Others still rely on fragmented data, delayed reporting, or supplier forecasts that provide limited advance warning. In stable conditions, these gaps may appear manageable. Under sustained demand pressure, they quickly become constraints.

Diversification alone does not guarantee resilience. Expanding a supplier base across regions is valuable, but without consistent insight into capacity, lead-time variability, and upstream risk, diversification can simply redistribute exposure rather than reduce it. Visibility remains the differentiator.

The return of just-in-case, with constraints

One of the most visible shifts since 2022 has been the gradual return of just-in-case inventory strategies. The experience of widespread shortages highlighted the cost of operating with no margin for disruption. As a result, strategic buffers, redundancy, and safety stock are again part of procurement discussions.

Reintroducing these strategies, however, has proven complex. Forecasting remains volatile across many industrial segments, and budget pressure continues to limit how aggressively organisations can build inventory. Procurement teams are often asked to improve resilience while simultaneously managing working capital and carrying costs.

The most effective organisations have taken a targeted approach. Rather than buffering across the board, they focus on critical components, long-lead items, and single points of failure. Resilience is applied where it delivers the greatest risk reduction. This requires disciplined prioritisation and alignment across procurement, operations, and finance.

People remain a critical and often overlooked risk

Technology and process improvements receive much of the attention in supply chain discussions. Workforce continuity receives far less, despite its impact on execution. Since 2020, many procurement organisations have experienced retirements, restructuring, and turnover. In some cases, institutional knowledge has been lost faster than it can be replaced.

At the same time, procurement roles have grown more complex. Digital platforms, analytics, and cross-functional collaboration are now core requirements. Teams are expected to interpret data, assess risk, and communicate trade-offs clearly to leadership, often under compressed timelines.

Not all organisations have kept pace with the skills required to support this shift. Tools alone do not create resilience. Experience, judgment, and digital fluency remain essential. As demand builds, procurement teams with depth and continuity will be better positioned to respond decisively.

Market stability remains elusive

Industrial demand is strengthening, but the broader operating environment remains uncertain. Geopolitical pressures continue to influence trade policy and regional manufacturing decisions. Cost volatility persists across materials, labour, and logistics. Even where conditions appear stable, new risks continue to emerge.

These dynamics reinforce a lesson learned from recent years. Resilience cannot be treated as a one-time initiative – it must be revisited continuously as conditions change. Procurement teams that rely on static assumptions or backward-looking benchmarks risk being caught off guard when demand shifts.

Scenario planning, supplier engagement, and contingency modelling are increasingly operational necessities rather than theoretical exercises.

Applying the lessons with discipline

The most important takeaway from the past five years is not simply that disruption is possible. It is that preparedness compounds over time. Organisations that treated the last period of volatility as an anomaly may find themselves exposed again. Those that institutionalised lessons through process changes, investment decisions, and talent development are entering the next demand cycle from a stronger position.

As industrial momentum builds heading into 2026, procurement leaders have an opportunity to apply these lessons with discipline. Strengthening visibility, refining diversification strategies, and investing in people are not defensive measures. They are foundational to sustainable growth.

The next demand surge will not reward urgency alone. It will reward organisations that prepared deliberately, acted early, and built supply chains capable of absorbing change without losing control.

About the author:

Frank Cavallaro, CEO, A2 Global Electronics

The post Have we learned enough? Preparing for the next industrial demand surge appeared first on Procurement Pro.

Global semiconductor sales reached $795.6 billion in 2025, representing an increase of 26.2% year-over-year and marking one of the strongest annual expansions in the industry’s history. Growth accelerated over the course of the year, culminating in Q4 2025 revenues of $238.9 billion, up 38.4% compared to Q4 2024, reflecting strong demand across several key application areas, particularly data centre infrastructure and AI-related systems.

End-market segments: computer applications lead industry expansion

From an end-market perspective, 2025 growth was primarily driven by the computer segment, which expanded by more than 60% year-over-year. this exceptional performance reflects continued investment in data centre infrastructure and ai-related computing platforms, making computer by far the largest contributor to overall semiconductor market growth.

Government-related demand increased by 15%, supported by defence and infrastructure spending. The Industrial segment returned to growth with an increase of 5%, suggesting that the inventory corrections and weaker capital expenditure environment seen in previous years are gradually easing.

Regional markets: strong growth in Asia Pacific and the Americas

Regionally, 2025 semiconductor sales increased strongly in Asia Pacific/All Others, up 45.4% year-over-year, followed by the Americas, which grew 31.4%, and China, up 17.9%, reflecting continued strength in data centre, AI-related, and advanced logic demand. Europe recorded moderate growth of 6.7%, while Japan declined by 4.3% on a full-year basis.

Product segments: logic and memory drive market growth

Growth in 2025 was broad-based across most semiconductor product categories but was clearly led by logic and memory devices. Logic devices delivered the largest contribution to overall market expansion, supported by demand for high-performance chips used in data centres, AI accelerators, and advanced computing systems.

The memory segment also recorded strong growth, continuing its recovery from the 2023 downturn, supported by improved pricing and strong demand for high-bandwidth and high-capacity memory solutions.

Other categories, including microprocessors, analog, and sensors, recorded solid growth, while discrete devices remained slightly negative on a full-year basis.

Outlook: continued global semiconductor growth towards $1 trillion

The global semiconductor industry delivered its strongest year on record in 2025, coming close to the $800 billion level. Based on the latest WSTS forecast, global semiconductor sales are expected to continue expanding in 2026, with the industry approaching the $1 trillion milestone.

WSTS will update its consensus semiconductor market forecast in May 2026 and will communicate the results via a dedicated press release on 2nd June 2026.

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This projection based on Q1 memory price assumptions, which indicate that pricing pressure and constrained supply will begin to ease in the second half of the year. The global smartphone market will face significant challenges in 2026 as tightening memory supply and elevated pricing place increasing cost pressures for vendors. Memory now accounts for a significantly larger share of the smartphone bill of materials (BOM), eroding vendor profitability, particularly in entry-level devices. Since 4Q25, smartphone manufacturers have already begun raising retail prices in order to maintain profit margins. However, sustained price increases are likely to weaken demand, particularly in price-sensitive emerging markets.

Further memory pressure and geopolitical volatility raise the risk of over 15% smartphone shipment decline in 2026

Downside risks to the forecast remain significant. If memory prices continue rising into the second half of 2026 due to tight supply and increasing AI server demand locking in production capacity, smartphone vendors will face further cost escalation across both entry-level and premium devices. At the same time, escalating geopolitical tensions in the Middle East could amplify macroeconomic volatility including higher energy prices, freight costs, and foreign-exchange instability, further weakening consumer upgrades in price-sensitive markets. Under this downside scenario, global smartphone shipments are expected to decline by more than 15% in 2026, potentially exceeding the 12% contraction recorded in 2022.

“Rising memory costs and macro headwinds are expected to impact smartphone demand unevenly across price segments,” said Zaker Li, Principal Analyst at Omdia. “Devices priced below $100 are forecast to decline by nearly 31% year-on-year in 2026, reflecting the severe margin pressure vendors face in ultra-low-cost segments, which are highly sensitive to even modest shifts in the macroeconomic environment. Smartphones in the $100-$399 range, which represent the core volume bands of the global market, are also expected to contract as rising memory prices push retail prices upward in price-sensitive markets. These segments are largely served by entry-focused vendors that rely heavily on LPDDR4X memory, operate with thin margins, and often have lower priority in the memory supply chain, leaving them more exposed to cost inflation and potential supply shortages. As a result, vendors concentrated in these price tiers are expected to face production constraints and shipment reductions, with many projected to experience double-digit declines in 2026.”

“In contrast, the premium segment is expected to remain relatively resilient despite rising component costs. Devices priced above $800 are forecast to grow by around 4% in 2026, supported by stronger brand positioning and greater pricing flexibility. Apple maintains a dominant presence in the high-end market and benefits from strong supply chain relationships and higher margins that help absorb component cost inflation. Samsung also benefits from vertical integration and internal semiconductor capabilities, which provide greater security of supply and priority access to key components. While Samsung still utilises LPDDR4X in some models and faces similar cost pressures, its supply chain advantages reduce the risk of significant shortages.

“The evolving cost environment is reshaping dynamics across the global smartphone supply chain,” added Li. “As entry-level smartphone demand weakens, suppliers of mid- and low-end components – including chipsets, camera modules, and other key parts – are likely to face declining orders and intensified pricing pressure. Vendors are already responding by simplifying product configurations and tightening BOM costs. At the same time, volatility in memory pricing is pushing brands toward shorter-term production planning and smaller order volumes, increasing operational pressure across the supply chain. Smaller ODMs and specialised component suppliers will also face growing consolidation risks as margins compress and demand becomes more concentrated among leading brands. In this environment, vendors will need to prioritise higher-value product innovation and disciplined production planning, while channel partners strengthen inventory management and demand forecasting to navigate slower replacement cycles and shifting consumer demand.”

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The report, which analyses insights from 250 global C-level semiconductor leaders, finds a decisive shift in the sector: AI is no longer experimental, but scale is a challenge. More than half of the interviewed organisations report fragmented deployments, in which AI runs in isolated use cases, pilots, or experiments rather than being integrated into enterprise-wide workflows and systems. While 43.6% report AI is fully embedded across multiple functions, and only one company said that AI is not currently a priority, just 27.4% believe their organisations can adopt and scale AI rapidly.

HTEC notes this fragmentation mirrors what it sees in conversations with clients across the industry, where organisations are struggling to connect individual AI initiatives and build AI-first operating models capable of delivering meaningful results and repeatable ROI.

Forming as part of HTEC’s broader global study of 1,529 C-suite executives across the United States, the United Kingdom, Germany, Spain, Saudi Arabia, and the United Arab Emirates, this publication offers a clear view into how semiconductor organisations are adopting, deploying, and scaling artificial intelligence.

Opportunities: where AI drives value

Semiconductor leaders are clear about AI’s most valuable applications:

• Advanced R&D: 52.4% see AI accelerating simulation, lifecycle monitoring, and design optimisation
• Quality & compliance monitoring: 51.2% highlight AI-enabled inspection and traceability improvements
• Architecture optimisation: 44.8% focus on enhancing chip and accelerator performance
• Compiler & software stack optimisation: 40.0% cite improvements in workload efficiency and differentiation
• Yield optimisation: 39.6% identify process control and manufacturing gains as a key benefit

AI is increasingly viewed as an R&D acceleration layer, a yield and compliance engine, and a product and platform differentiator. However, realising full value requires integration across data platforms, manufacturing execution systems, and cross-functional workflows.

Edge AI: strategic priority with high confidence

Edge AI plays a uniquely strategic role in semiconductors. 90% of leaders report familiarity with Edge AI, and 96.4% express confidence in their ability to deploy it. Notably, most semiconductor organisations are pursuing hybrid deployment models, combining internally built capabilities with external platforms and strategic partnerships to accelerate innovation while maintaining control over critical systems and IP.

In fabrication, assembly, and test environments, inference close to tools and production lines reduces latency, protects proprietary IP, and enables real-time control. As adoption grows, Edge AI strategies are being shaped not only by performance requirements but also by considerations of data governance, security, sovereignty, and the balance between in-house expertise and partner ecosystems.

Execution gap: scaling AI remains uneven

Readiness to capture AI’s full value remains uneven. While 27.4% of organisations feel equipped to scale AI rapidly, the majority say scaling will take time, report limited value capture despite experimentation, or are struggling to keep pace with AI developments.

Leaders estimate that failing to act on AI and Edge initiatives would set their organisations back by an average of 1.77 years. In an industry defined by compressed design cycles and capital intensity, that delay can materially affect product roadmaps, customer commitments, and competitive positioning.

Challenges: alignment, integration, and skills gaps

If value is to be delivered according to the perceived opportunities, these challenges need to be resolved:

• Executive alignment at execution level: 42.8% cite lack of alignment across the executive team as a primary barrier to deeper AI adoption. While 88.8% report strong or full agreement on AI direction, translating strategy into coordinated investment, ownership, and measurable outcomes remains difficult
• Integration complexity: 41.6% report difficulty embedding AI into existing engineering workflows, EDA environments, and manufacturing systems. Integrating AI into IP-sensitive, precision-driven processes introduces both technical and governance friction
• Capability gaps: all respondents report technical skill shortages. The most acute gaps include cybersecurity and data privacy, AI/ML, and data engineering and analytics expertise. These shortages are already affecting performance, driving margin pressure, reducing innovation, and increasing costs

“Semiconductor organisations understand that AI is becoming embedded infrastructure across design and manufacturing. The differentiator now is execution – aligning leadership, closing skill gaps, and building secure, scalable Edge-to-Cloud architectures that turn AI from isolated capability into sustained competitive advantage,” said Craig Melrose, Managing Partner, Advanced Technologies at HTEC.

The State of AI in the Semiconductor Industry 2025-2026 is now available for download: https://htec.com/insights/reports/executive-summary-the-state-of-ai-in-the-semiconductor-industry-in-2025-2026/

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SnapMagic was created to solve a common problem engineers face when designing electronics: finding reliable component models. Engineers often spend hours creating symbols, footprints, and 3D models, and SnapMagic pioneered the digital CAD library to create a place for engineers to get everything they need in one place.

Engineers can now find ready-to-use parts that meet industry standards. The result is less rework, fewer design errors, and faster development. Component selection and design-ready assets are now in one place, so the jump from ‘I picked a part’ to ‘it’s in my PCB layout’ happens in seconds instead of hours.

The new integration brings over ten million CAD assets into the Future Electronics digital experience, allowing engineers to download models in formats compatible with leading ECAD tools without leaving the website. Each model is aligned with manufacturer specifications to support accuracy and consistency throughout early design stages.

“Providing engineers with immediate access to reliable CAD resources reinforces our commitment to supporting customers throughout the entire design journey,” said Georgia Genovezos, Corporate Vice President of Digital Marketing at Future Electronics. “By working closely with SnapMagic, we are delivering a seamless experience that connects component selection with practical design execution.”

“Our goal is to remove friction from the design process by making CAD models easy to find and easy to use,” said Natasha Baker, CEO at SnapMagic. “Partnering with Future Electronics allows SnapMagic to support engineers as they are selecting components – without needing to change their existing workflows.”

This joint launch represents a shared focus on design enablement and reflects both companies’ continued investment in tools that help engineering teams move faster and design with confidence.

“For us, the strategy is simple: meet engineers where they already are. By integrating our CAD library directly into Future’s catalogue, we’re putting millions of design-ready assets in front of engineers at the exact moment they need them, during component selection. This is part of our broader ‘Digitise the Design Win’ approach, where we partner with distributors and manufacturers to connect engineers, CAD tools, and component suppliers into one seamless workflow,” said Baker.

To learn more about SnapMagic CAD models now available on FutureElectronics.com, visit the dedicated landing page.

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