Volatility has become the new norm for the electronic components industry, and it looks to stay that way for some time. After a relatively calm year in 2024, 2025 saw the market shift unexpectedly multiple times, including the US-China tariff war affecting the global landscape, the surprise end-of-life announcements for DDR4, and the Nexperia trade restrictions impacting the automotive sector late in the year. As these disruptions sprang up, those affected were left scrambling to adjust at the last minute.
Unfortunately, 2025 wasn’t an aberration – 2024 was. Shortages and other disruptive events are occurring more frequently in recent years, and the ongoing geopolitical tensions are only raising the likelihood of that trend continuing. If procurement teams stick with their previous sourcing strategies, they will have to continue to chase down parts whenever the market dictates it.
This isn’t a sustainable strategy for success. As your procurement team finalizes its plans for 2026, you need to build with flexibility in mind so you can adjust whenever the next disruption occurs.
Abnormal is the new normal
2025 was a chaotic year defined by the various shortages that disrupted procurement across the industry, and those shortages don’t seem to be ending as the calendar turns to 2026. The Nexperia situation remains unresolved, with orders placed in the final quarter of 2025 and later facing delays and shortfall; the DDR4 shortage has continued to drive prices skyward; and to top it off, the explosion of AI and data centre needs is now putting a heavy strain on DDR5 supply.
This continues the broader trend of the rise of shortages. More than half of the major shortages in the 21st century have occurred in the past decade, with six in the past five years alone. That represents a significant jump from the previous decade, when there were only four shortages in total.
Beyond the increase in frequency, shortages are also becoming more disruptive. The shortage affecting automotive PMICs, MCUs, and MOSFETs lasted four years; the two affecting ICs, MLCCs, and CPUs lasted three years each. These shortages weren’t short-term random occurrences; they were extended disruptions that affected large swaths of the industry for a significant amount of time.
Moreover, shortages are increasing in severity. 2025 saw an increase of more than 800% in 16GB DDR4 RDIMM prices and a price increase of more than 700% for Nexperia products amidst the ongoing shortages. Compare that to shortages in previous years, such as the mere 75% increase in price DRAM saw during its shortage in 2014 or the 80% price increase for NOR flash in 2005. The price jumps fluctuate for various reasons beyond just when they occur – ICs and capacitors tend to see a larger increase in price during shortages than commodities, for example – but we have consistently seen greater price jumps in recent years as shortages have become more impactful on the market.
Account for disruptions before they arise
As you finalise your plans for 2026, build safeguards into your procurement strategies to protect against these potential impacts on your manufacturing processes. Authorised distributors are great options for long-term procurement, but the geographical and resale restrictions placed upon them by the manufacturers they work with hamper their ability to source parts on the open market. Independent distributors, by contrast, have the broad industry knowledge and global flexibility to secure critical parts during difficult market conditions.
Without the restrictions from manufacturers, independent distributors can access a greater range of parts on the open market. Unique service offerings, such as buying excess inventory for resale, create opportunities for alternative sourcing channels not available to authorised distributors. The global reach of the top-tier independent distributors grants them the ability to buy and ship parts from anywhere in the world, allowing your supply chain to continue moving when parts are hard to find. The more avenues available, the more likely it is you get the right parts at the best price possible – without a 26-week lead time.
Even outside of shortages, working closely with an independent distributor will help you anticipate potential disruptions and prepare before they arrive. While authorised distributors have a deep well of knowledge of the specific manufacturers they work with, the wide scope of independent distributors’ dealings across the industry provides a lens into broader market conditions at any given moment. The secondary market is often at the forefront of industry disruptions, sensing the headwinds before shortages begin in earnest. The earlier your team can see the problem, the easier and more cost-effective it will be to prepare for its effects.
Build strong distributor relationships before volatility strikes
Simply having an independent distributor in the plans in case of a procurement emergency isn’t enough as these emergencies become more commonplace. Strong relationships solve problems in this industry, especially in times of shortage. The best time to build that relationship with an independent distributor is before you truly need it.
Whenever the next shortage comes in 2026, you will want to be prepared with the right resources and market insights before it affects your manufacturing schedule. The more knowledge and sourcing channels you develop now, the better prepared you’ll be when the inevitable happens.
You can’t expect the unexpected, but you can prepare for it. In this time of constant volatility in the market, the best time to prepare is now.
About the author:
Todd Snow, Chief Procurement Officer, Smith
This article originally appeared in the Jan/Feb 26 issue of Procurement Pro.
