The consumer electronics sector has long set the pace for global technology demand, but in recent years, the supply chain underpinning it has come under sustained pressure.
From semiconductor shortages and rising geopolitical tensions to shifting consumer expectations and sustainability requirements, the challenges are as multifaceted as they are persistent.
For procurement professionals, the past five years have served as a crash course in resilience, agility, and forward planning.
Shifting sands: semiconductors and beyond
At the heart of consumer electronics supply chain disruption lies the semiconductor shortage – a crisis that began in 2020 and continues to ripple across industries. Smartphones, tablets, gaming consoles, smart TVs, and wearables all depend on reliable access to complex silicon components. While some capacity constraints have eased, lead times remain volatile, particularly for advanced nodes and power management ICs.
Procurement leaders have had to pivot away from just-in-time inventory strategies, instead building deeper relationships with suppliers and investing in buffer stock. In some cases, businesses moved towards direct purchasing agreements with semiconductor foundries to secure long-term allocations – an approach previously reserved for larger OEMs in the automotive sector.
Global pressures: trade and tariffs
The growing bifurcation of global trade, especially between the US and China, continues to impact the consumer electronics supply chain. Export restrictions on high-performance chips, new tariffs, and increased scrutiny of Chinese vendors have prompted companies to reassess their supplier networks.
This decoupling has driven a push towards regionalisation. Electronics manufacturers are increasingly sourcing components closer to final assembly sites, particularly in Southeast Asia, Eastern Europe, and North America. While this has improved supply chain visibility, it has also introduced new cost and compliance challenges.
Logistics and labour constraints
Beyond component availability, logistics remains a bottleneck. Ocean freight prices have stabilised since their pandemic-era highs, but disruptions such as the Red Sea conflict and congestion at key ports continue to affect delivery schedules. In addition, warehouse labour shortages and strikes in logistics hubs have slowed throughput.
Procurement teams are looking to mitigate these risks through multimodal shipping strategies, demand forecasting improvements, and investments in digital supply chain platforms that can provide real-time tracking and predictive analytics.
Consumer demand and product complexity
Product lifecycles in consumer electronics are notoriously short. A smartphone generation may last less than a year, yet the bill of materials can include hundreds of components from dozens of suppliers.
At the same time, the rise of smart and connected devices has introduced new complexity. Integrating wireless modules, sensors, and AI accelerators places additional demands on sourcing teams, who must ensure component compatibility, compliance, and security – all while managing cost targets.
This has led to growing interest in supplier collaboration tools and PLM (product lifecycle management) systems that allow design and procurement teams to work in tandem from the earliest stages of development.
Sustainability and circularity pressures
Sustainability has emerged as both a regulatory requirement and a consumer expectation. From the EU’s Right to Repair legislation to extended producer responsibility (EPR) schemes, electronics companies are being held accountable for their environmental impact.
Procurement professionals must now consider the recyclability, energy usage, and provenance of components. This includes sourcing materials from conflict-free zones, vetting suppliers’ emissions targets, and designing for disassembly. The shift towards circularity also encourages procurement to engage with aftermarket suppliers and refurbishers, extending the lifespan of certain components and reducing reliance on virgin materials.
Towards a more agile future
As the consumer electronics industry faces increasing complexity, the role of procurement has expanded beyond cost control. Strategic sourcing, risk management, and supplier development have become core competencies.
Forward-thinking procurement teams are adopting a mix of digital tools, alternative sourcing models, and cross-functional collaboration to create more resilient supply chains. Whether it is through digital twins, AI-driven analytics, or closer alignment with engineering teams, the emphasis is firmly on agility.
The consumer electronics supply chain may not return to its pre-2020 normal – but it is evolving into something more robust, transparent, and strategically significant. For procurement professionals, this shift presents an opportunity to drive value far beyond the balance sheet.
