Anglia warns of price instability as lead times shorten

SCSAnglia Components is advising customers that lead times on chip resistors and passives are now generally reducing – they are seeing 12-13 weeks now in some cases. However, the improved availability may lead to some price instability according to the distributor.

Commenting on the reasons for this development, Steve Rawlins, CEO, Anglia Components, observed, “Weak iPhone demand and a softening of the Chinese economy in the face of sanctions are two of the factors behind this. We believe we are in an inventory correction period as many customers have had to purchase in large quantities to secure components. I believe that this build-up of customer inventory could take till the end of Q1 next year to burn off.”

Steve Rawlins believes that although improved availability is good news in some ways, there is likely to be price instability as this material is worked through. He said,”For our industry in general massive lead time swings don’t do anyone favours in the long term as it becomes difficult to predict demand for both the distributor and the customer. We all want growth but in a measured way so everyone can plan material and at the end of the day deliver to the end customer on time.”

Steve Rawlins concluded, “Anglia will use this opportunity to rebuild inventories that we’ve been using to keep customers supplied during the shortages. We are working closely with our customers to understand their demand going forward, to make sure that we put in place the right stock profile and are able to keep supporting them whatever the market does in the longer term.”