Issue link: https://iconnect007.uberflip.com/i/1477844
12 SMT007 MAGAZINE I SEPTEMBER 2022 United States. In the last three months, we've had an annualized rate for auto production of over 10 million units. We're not back to pre- pandemic levels, but we're about a million to a million-and-a-half units higher than the begin- ning of the year. At the low point in September 2021, we assembled just about seven and a half million units on an annualized basis. We are 30% up from September 2021, and there are several contributing factors. We saw in the most recent GDP report—which wasn't very good—that both consumer demand for goods, and business investment and equip- ment, were all down. Anytime you see demand easing, it provides some breathing room for the supply chain to recover. Now, it isn't necessar- ily great that demand is waning—these are two sides of the same coin. ere is risk, but these factors contribute to the improvement of sup- ply chain dynamics. Johnson: How does this relate to semiconduc- tors? If the supply chain is easing, that's good. But I have recently spoken with a number of EMS companies and each one has shared some flavor of, "We can get most of the parts, but all it takes is one part that we can't get and we're stuck; the availability is not consistent." What insight does IPC have about component availability? DuBravac: You're right, all it takes is one part to be out of stock or one part to have an inac- curate delivery date. EMS providers have been dealing with that for two years now. ey place an order, think they have an accurate delivery date, and it ends up delayed two, four, eight weeks, or more. It will take some time for that to heal and for us to see those types of delays become less severe. I know everyone wonders about the tim- ing, but you must see it as a process—some- thing that will continue through 2022. Will we see these issues next year? Definitely, in some instances. Certain components will still have low stock availability. ere will be prolonged lead times. Some companies will try to work around that. For example, we hear of OEMs that have engineered out some of these com- ponents when they can. Johnson: What other coping strategies have you heard about? DuBravac: It's many of the normal ones you would expect. I mentioned engineering out components that are in short supply, but it's also stockpiling, or ordering based on antic- ipated needs, not just what you need today. Some companies have at times been able to find other sources as well. However, we don't get the sense there has been a lot of stockpiling. We don't get the sense that there is excess inventory sitting out there which could come back to haunt the industry later. If you have excess inventory and your company decides to get rid of that, then you could see excess availability and prices drop- ping. In this environment, we probably won't see that. Certainly, companies that were hold- ing onto any excess inventory would have been selling it into the market when prices were Shawn DuBravac