Information on the Current Market Situation for Semiconductors and Electronic Components
Dear Sir or Madam,
We would like to inform you at an early stage about a significant worsening of the current situation in the global electronics market.
According to consistent reports from our international suppliers and market partners, several developments are simultaneously leading to an increasing shortage of materials and manufacturing capacity. These include, in particular, the sharp global rise in demand for semiconductors and electronic components driven by applications in the fields of artificial intelligence (AI) and data centers, geopolitical tensions, trade policy measures, rising raw material and energy costs, and limited production capacities among manufacturers of electronic assemblies and printed circuit boards.
These constraints result exclusively from developments beyond our control—among international raw material and semiconductor suppliers, as well as manufacturers of printed circuit boards and base materials.
Our upstream suppliers are already reporting far-reaching constraints:
- Material allocations for key base materials such as glass fabric, prepregs, copper foil, and resins,
- highly volatile purchase prices without long-term price guarantees,
- extended procurement and production lead times,
- limited availability of electronic components, and
- short-term price adjustments due to significant cost increases along the supply chain.
In some cases, even delivery dates and price commitments that have already been confirmed by our suppliers are now subject to a new review of material availability.
We are actively addressing this development by diversifying our supplier base, strategically building up safety stock for particularly critical components, and closely monitoring the market to identify bottlenecks early on and secure your supply as much as possible.
Since many of our products use electronically assembled printed circuit boards, these developments have a direct impact on our supply chain. Despite a forward-looking procurement strategy, close collaboration with our suppliers, and continuous market monitoring, we cannot currently rule out the possibility that availability, delivery dates, or purchase prices may change at short notice.
In light of this, we must point out that quotes, pricing, delivery dates, and order confirmations—to the extent that they depend on the availability of electronic components and suppliers—are subject to exceptional and unforeseeable market changes. Should an adjustment become unavoidable in individual cases, we will, of course, inform you in a timely manner and work with you to develop a viable solution.
To secure your supply in the long term, we recommend that you plan your anticipated needs as early as possible and, where economically feasible, formalize them through framework agreements. We would be happy to discuss suitable hedging models with you on an individual basis—ranging from shorter-term agreements to framework contracts with terms of up to twelve months—depending on your needs and risk profile. Likewise, reliable forecasts and range planning help us secure materials and production capacity early on and ensure your supply as effectively as possible.
Our top priority remains unchanged: to minimize the impact of current market developments on your ability to deliver. To this end, we maintain close communication with our international suppliers and continuously evaluate alternative procurement and hedging strategies.
According to our market partners, the electronics industry is currently still in the early stages of a supply situation that is set to worsen further. This makes early, collaborative planning between you and us all the more important.
In the coming weeks, we will be reaching out to you directly to work with you on analyzing your demand planning. Of course, your personal contact person is also available to assist you at any time.
We sincerely thank you for your trust and for our collaborative partnership.
MENTOR Letter on the Current Market Situation for Semiconductors and Electronic Components_Web