COVID-19 has affected many industries around the world including the freight industry, and as a result have increased their delivery times and freight costs. This has severely impacted electronic manufacturers over the course of 2020. This year, we expect this trend to continue as the annual increase of freight rate by courier companies will also be included.
Increase in shipment costs
At Precision, we primarily use DHL and TNT as our preferred courier services for PCB and PCBA shipments.
- DHL have stated on their website that there will be an average price increase of 4.9% for all shipments effective January 2021.
- TNT have stated that that effective 2 November 2020, the ‘Temporary Surcharge‘, which they applied during the Covid-19 pandemic will now be renamed as ‘Peak Surcharge‘.
Increase in raw materials costs
KB is one of the largest PCB raw material suppliers in China. In August 2020, we received an email from KB notifying us of an increase in raw material prices for PCBs (including FR4, PP). We also noticed that KB kept increasing their prices periodically over September, October and November of 2020.
With KB increasing their prices, it is highly likely that other suppliers will soon follow suit. We currently predict that there will be a further increase to the cost of manufacturing PCBs in 2021 as the price of copper will also increase.
At Precision, we always try our best to absorb any price increases, however we will keep you informed of any changes.
Note: FR4, PP are two of the raw materials that are required to manufacture PCBs.
AKM factorY fire and it’s impacts:
In October 2020, AKM’s semiconductor factory in Japan caught fire, which caused disruptions to the production of modules. AKM is the leading manufacturer of TXCO (Temperature Compensation Crystal Oscillator), which is used to build wireless semiconductors for consumers like U-blox and Telit.
AKM has notified to their stakeholders that the shortage of TCXO production will lead to price increase in 2021 and delivery delays that might last as long as Q1 2022.
Silicon labs price increases:
Semiconductors manufacturers such as Silicon Labs, Microchip, TI and others recently notified their stakeholders about the severe shortage of available materials. Earlier in December 2020, Silicon Labs sent a notification that they have increased the price of Internet of Things (IOT) components by 10%. Various key components like Integrated Circuits (ICs) have increased in price and are facing extremely long lead times (around 12-20 weeks).
Please contact us (form) or your Precision account manager if you have any concerns about your project build.