The microchip shortage the world has been experiencing since the Covid pandemic shows signs of easing now we’re in 2023, but the supply chain for certain components, especially some rare electronic components like certain chips, is still rocky.
So, with this in mind, let’s look at what happens if you’re trying to source and vet suppliers of rare electronic components like these today in China.
Many electronic components continue to be rare
If you tried to purchase a new automobile in the past few years, it’s possible that you had to wait a while for it to be delivered due to production delays largely caused by the scarcity of chips, wiring looms, and other electronic components that are in relatively short supply. The Covid pandemic and the Russian invasion of Ukraine are two contributing factors to such shortages.
It’s not only autos, either, more common consumer products like gaming consoles have also been hit by a lack of components. The popular Nintendo Switch and Sony PlayStation 5 have also been slow to get to shelves, causing the manufacturers to revise their profit forecasts in recent times.
Time is not on your side
If there is a hot component that is rare, we will usually need to send requests to multiple suppliers in China and buy it directly from whoever has it. This process has to be done very quickly as the price and availability both change daily.
For example, Sofeast helped a customer purchase components like this recently. We sourced the component in China in the evening and it was gone by morning when the customer was ready to pay… Setting us back to the starting point.
Two options for sourcing
- You may choose to buy from component suppliers if you can find them when they have the components in stock.
- Another option is to work with a Chinese parts broker. But they are mostly trading companies who generally do not speak English, and unfortunately, there’s no guarantee that they will always have the components required as soon as you need them.
Following the usual due diligence process on a broker and suppliers may not be possible
When it comes to working with a parts broker, it’s hard to vet them and assure that they’re suitable (even if you’re comfortable with entering into a relationship with what is effectively a middle-man) because they tend to be reluctant to send information used to do due diligence and check their suppliers’ legitimacy. Oftentimes, they will consider this a business secret.
Therefore, trying to source rare electronic components via this kind of supplier when you need them in a hurry is counter-productive, because the components are already sold before they’d (possibly) send a reply and the due diligence process starts…
Buying direct will be faster
The bottom line is that you’re in competition with a lot of different companies for a small pool of components that usually sell out quickly.
We usually always advise vetting potential suppliers carefully when sourcing from any country. However, doing enhanced due diligence on suppliers will stop you from getting the parts you need quickly. So in the situation where you need to buy quickly, you need to research and then make a decision and place the order very quickly.