Resource Category: Industry developments

The next electronics shortage cycle is here: what this means for your product supply

The last component shortage cycle didn’t end. It shifted focus.

After the EV-driven surge that disrupted supply chains globally, a new wave of demand is building, driven by AI infrastructure, data centres, and high-performance computing.

The pattern is familiar. Demand is concentrating. Lead times are extending. Suppliers are prioritising larger buyers again.

This marks the early stage of a new allocation cycle.

For companies developing electronic products, the key question is no longer whether supply will tighten. It’s how early you adapt and respond.

In practice, this leaves businesses with two choices: secure supply early or redesign to reduce dependency.

The next shortage cycle is already forming

In Electronics supply chain cycles explained, we outlined how shortages occur when demand outpaces supply, shifting how components are distributed and prioritised. That same pattern is re-emerging, driven by a different set of industries.

AI infrastructure and data centre expansion place sustained pressure on critical component categories. These sectors operate at scale and move quickly, often absorbing a large share of available supply.

As this demand builds, suppliers adjust. Allocation tightens. Lead times extend. And access grows less predictable for smaller or mid-market buyers.

Shortage cycles don’t start with a clear break. They start with signals that seem easy to overlook, and by the time they become obvious, the most important supply decisions have already been made.

For product teams, these early signals matter because they show how much flexibility remains in securing supply.

Why reacting late intensifies risk

One of the defining characteristics of a shortage cycle is timing. By the time teams see constraints, suppliers have already allocated supply to larger customers.

Constraints force teams to react rather than plan. This can mean:

  • accepting longer lead times
  • paying higher prices
  • redesigning products under pressure to accommodate available components
  • missing production windows.

In some cases, this situation also leads to increased reliance on alternative sourcing channels, introducing additional quality and compliance risks.

At that point, options narrow to choices such as securing supply where possible or adapting the design to reduce exposure.

Acting early means committing or redesigning

In the current allocation cycle, waiting for lead times to improve is rarely an option. Many teams are seeing quotes with up to 52 weeks delay or more, on critical components.

At that point, organisations have two practical levers: commit earlier to secure supply or redesign to reduce exposure.

Placing orders further in advance, or providing credible forward demand visibility, now plays a necessary role in reserving material in an allocation-driven market. Once suppliers prioritise larger buyers, orders placed closer to delivery are far more likely to face extended lead times, limited availability, or cost escalation driven by spot pricing.

However, early commitment does not always resolve the problem.

When teams cannot secure acceptable lead times, targeted redesign becomes necessary. Through the engineering teams at Intellidesign and Nautech, the Circuitwise Group can help customers reassess designs constrained by long-lead times or heavily allocated components, identify viable alternatives, and implement design changes that improve availability without compromising performance, manufacturability, or regulatory compliance.

When used deliberately, these approaches allow teams to regain control. Forward ordering secures supply where possible. Redesign reduces dependency where it cannot.

In an allocation environment, organisations that act early and apply both levers retain more control over cost, timelines, and delivery outcomes.

Your manufacturing partner choice is crucial

Responding early becomes difficult without a clear view of what’s changing. This is where a manufacturing partner becomes important. Partners don’t remove uncertainty; they provide timely insight into supplier behaviour, lead time movement, and emerging pressure points.

Circuitwise Group works with companies developing high-reliability products, where supply disruption carries significant consequences.

When components begin to tighten, Circuitwise works alongside customers to assess options. This includes reviewing alternatives, assessing implications for design and compliance, or advising when it may be necessary to commit to supply earlier.

The approach remains collaborative. Decisions remain with the customer, supported by earlier visibility and more informed input.

The Circuitwise Group advantage

The Circuitwise Group combines Circuitwise, Intellidesign, Nautech, and ASL. Together, the group brings capability across sourcing, design and engineering, and high-reliability electronics manufacturing.

In a constrained supply environment, this creates a practical advantage. The group maintains visibility into supplier communications, tracks lead time movements across component categories, and applies combined purchasing scale to improve access to constrained supply.

This includes adapting designs through the Intellidesign and Nautech engineering teams, reducing dependency on constrained components when supply cannot be secured.

Smaller and mid-market buyers can find this level of insight, purchasing leverage, and design support difficult to access independently.

By combining sourcing scale with design capability, the Circuitwise Group enables teams to secure supply where possible and adapt where necessary. This creates a more coordinated approach to managing supply risk, supporting better decisions across the product lifecycle.

Early action shifts impacts and outcomes

Component shortage cycles aren’t new; however, the speed and scale at which they develop continue to increase.

In this environment, timing shapes outcomes.

Teams that delay decisions work within constraints that have already been set. Teams that move earlier, by securing supply where possible and redesigning where necessary, retain more control over cost, timelines, and design.

Securing long-lead time components early, redesigning to reduce supply risk, aligning forecasts with suppliers, and working closely with a manufacturing partner all help improve outcomes. If you see early signs of supply tightening, now is the time to secure critical components before allocation takes hold.

Get in touch with the Circuitwise team to discuss how to secure your supply before constraints take hold.

Electronics supply chain cycles explained: why components suddenly become hard to source

Longer lead times. Higher prices. Tighter supply. Sound familiar?

An electronic component that was readily available suddenly has a 40–50-week lead time. Pricing shifts overnight. Confirmed orders change without warning. Production plans start to slip.

These events are often treated as isolated disruptions. However, the reality is they are part of a broader, recurring pattern in the electronics industry: component shortage cycles driven by supply and demand imbalance.

This is known as an allocation cycle; a period where demand for components exceeds available supply, forcing suppliers to restrict distribution and prioritise certain customers.

Understanding how these cycles work helps product, engineering, and procurement teams interpret what’s happening and make better decisions earlier.

What drives component shortages?

At a high level, shortages occur when demand outpaces supply. In practice, several overlapping factors drive that imbalance.

1. Demand grows faster than expected

Electronics demand now spans multiple high-growth sectors, including:

  • AI and data centre infrastructure;
  • electric vehicles (EVs) and renewable energy systems
  • industrial automation and connected devices.

When these industries scale at the same time, demand for shared components increases rapidly.

Priority allocation is increasingly directed toward hyperscalers and AI infrastructure providers, leaving industrial and mid-market original equipment manufacturers (OEMs) with limited access regardless of existing supplier relationships.

2. Supply can’t scale at the same speed

Not all components are easy to scale.

Some critical categories, including advanced semiconductors, power components, and specialised materials, require long production lead times and significant investment to expand capacity.

This creates a lag between rising demand and available supply, which is a core driver of shortages.

3. Raw material constraints flow upstream

Shortages don’t start and end with complex components.

Limitations in raw materials can affect availability across the bill of materials, including parts often treated as low risk.

For example, sustained demand for silver across solar, EV, semiconductor, and AI applications has tightened supply since 2021, increasing pressure on passive components that are often assumed to be stable.

4. Demand signals become distorted

During shortages, companies often place larger or duplicate orders to secure stock.

This distorts true demand, making shortages appear more severe and contributing to instability when orders are later reduced or cancelled.

What happens during an electronic component shortage cycle?

When supply becomes constrained, the effects are rarely isolated. They tend to cascade across availability, pricing, and supplier behaviour at the same time.

Lead times extend significantly, sometimes beyond 12 months in constrained categories, making forward planning difficult.

Pricing becomes highly volatile. Costs can change weekly or even daily, with spot market premiums reaching two to three times standard pricing. This creates challenges for quoting and contract stability, particularly where fixed pricing has already been agreed.

Allocation decisions can shift with little notice. Even confirmed orders may be reduced or delayed, disrupting production schedules and procurement planning.

Supplier behaviour also changes. Priority allocation is typically given to high-volume or strategic customers, such as large OEMs or companies building AI infrastructure. Smaller or mid-market buyers with lower volume orders often find themselves pushed to the back of the queue, regardless of existing relationships.

As visibility decreases, communication becomes less actionable. Updates may not provide a clear view of timing, pricing impact, or overall exposure, leaving internal teams to assess risk with incomplete information. For procurement managers, this often becomes the most difficult part to manage: making decisions, defending forecasts, and communicating timelines to the business with less certainty than the situation demands.

The impact on product development and delivery

These conditions don’t just affect procurement; they create pressure across the entire product lifecycle.

Planning becomes unreliable as lead times extend and supply commitments shift. Production schedules that were previously stable can quickly become unworkable.

When components become unavailable or reach end-of-life unexpectedly, teams are forced into redesigns. These changes take time and often require additional validation, testing, or regulatory approval.

Many bill of materials carry hidden single-source dependencies that only become visible during a shortage. At the same time, engineering and procurement teams are often not aligned on long-term availability during the design phase.

As a result, products are frequently optimised for performance or cost, rather than supply resilience. When these cycles occur, this adds additional pressure under significant time and cost constraints, often with production commitments already in place.

How Circuitwise supports supply-constrained environments

This is where the role of a true manufacturing partner becomes critical.

Circuitwise partners with companies developing mission-critical products, where delays, redesigns, or quality issues carry significant consequences.

In supply-constrained conditions, Circuitwise shares visibility into sourcing constraints, lead time movements, and supplier communications as they emerge. Rather than passing on information once teams have already made decisions, the focus remains on surfacing risks early enough for procurement and engineering teams to act.

When components become constrained or unavailable, Circuitwise works alongside customers to assess options, advising on alternatives and the implications for performance, compliance, and production.

Supply chain uncertainty cannot be eliminated, and no single partner can remove it entirely. Circuitwise offers earlier visibility, shared knowledge, and a collaborative approach to planning, so that when conditions shift, procurement teams can respond more effectively.

The role of the Circuitwise Group

Managing component shortages isn’t just a sourcing challenge. It requires alignment across design, engineering, procurement, and manufacturing.

Circuitwise operates as part of the Circuitwise Group, Australasia’s pre-eminent electronics manufacturing services provider, with capability spanning electronics manufacturing, design, engineering, and sourcing for high-reliability applications.

In a constrained supply environment, our combined breadth translates into practical advantage. The Circuitwise Group brings deep knowledge of current market conditions, maintains visibility into supplier communications and lead time movements, and applies combined purchasing scale to improve access to constrained components.

For smaller and mid-market buyers, this level of purchasing leverage and market visibility is often difficult to access independently.

This creates a more connected approach to managing supply risk, bringing the right knowledge into each stage of the product lifecycle so teams can make better decisions earlier.

If you’re navigating ongoing supply uncertainty, get in touch to discuss how we can support your next build.

Component traceability for medical devices

Traceability of the components is a critical part of the quality assurance processes required to gain regulatory approvals for medical devices.

​The ISO 13485 Quality Systems Standard for Medical Devices requires that the product owner shall “plan and develop the processes needed for product realization” including “traceability activities specific to the product together with the criteria for product acceptance”.

​The company needs to document procedures that define the extent of traceability required for applicable regulatory requirements and what records need to be maintained. The standard specifically requires an organisation to “maintain records for each medical device or batch of medical devices that provides traceability for each”.

​Most companies developing medical devices with electronic components will outsource Printed Circuit Board Assembly (PCBA) to a contract electronics manufacturer like Circuitwise that has ISO 13485 certification.

​Traceability means the manufacturer needs to keep track of where every single component has come from and where it goes. This information is stored as part of the Device History Record that the product owner must maintain.

Most medical devices are Class IIa or Class IIb and implementing traceability at the batch level is usually sufficient. However, for applications where correct operation of the device is critical to sustaining or supporting a patient’s life (Class III), product manufacturers will ask for traceability at the device level. See the blog post on our contribution to development of emergency ventilators as an example.

​Tied in with traceability is the concept of identification. Each component and each assembled product must have a unique identifier so that only products that “have passed the required inspections or testing is released for dispatch, use or installation”.

​At Circuitwise, every PCBA has a serial number that facilitates our ability to keep records which components are used on any particular board. This ability is enabled by the Cluso inventory management system developed in-house at Circuitwise and now exported globally.

​The main steps in the PCB assembly process where traceability is critical are as follows:

  1. Incoming goods inspection and acceptance: Every part (including reels of parts or other packaging formats) entering the Circuitwise factory is photographed and a serial number attached. We check what we received is what we ordered and capture supplier information.
  2. Storage of components: Parts are stored in the Cluso smart storage system that facilitates easy and accurate retrieval of components from thousands of reels on the shelves. Each component is logged as it goes onto a shelf and the system ensure first in is first out.
  3. Pick and place production: As components are retrieved from the smart storage and allocated to the pick and place machines, they are again logged. Serial numbers are assigned to PCBs and captured in the Cluso system. A range of other information in captured during preparation for a production run including ensure the correct stencil is used, the lot number of the solder paste, its shelf life, temperature of the paste, last maintenance date of the paste printer, what version of Pick and Place program placement is used etc.
  4. Reflow: As the assembled PCB passes through the reflow oven, we record the temperature profiles used in the oven.
  5. First article inspection: The first PCBA is inspected to ensure it is 100% correct. This is used as a golden board for Automated Optical Inspection. A report of this first inspection is recorded.
  6. Automated Optical Inspection: Although not strictly necessary for medical devices, we maintain records of the AOI inspection of each PCBA.
  7. Through hold parts assembly: If the PCBA requires additional placement of through-hole components, then a similar traceability checks and records are undertaken as for the pick and place process.
  8. Electrical testing: As firmware is uploaded, its version number is recorded. After upload, very board undergoes electrical and functional testing to ensure it is working correctly. Records of the tests are entered into the Cluso system.
  9. Conformal coating: Were conformal coating or other processes are required to finish off the boards, records are again taken.
  10. Final assembly: Where Circuitwise assembles the final product the mechanical components are put through the same traceability regime to ensure every part is traced through to the final product.
  11. QC inspection: Prior to shipping the device undergoes a final quality control inspection, with procedures provided by the product owner. Records of the inspection are taken and certificates of conformity are issued.
  12. Packaging: Traceability is required in every aspect of the product delivery process. So again records are taken of the packaging used and any additional items included in the box, such as instructional materials. Where necessary, photographs are taken to prove all necessary items were present as the box was sealed.
Computer monitor displaying side-by-side comparison of a printed circuit board design during first article inspection, highlighting differences for quality control.
Above is an image of a board being compared to a customer design. During each run, we inspect the first board to ensure it is 100% correct – producing a golden board. Our unique first article inspection system automates the process of comparing the golden board against the design supplied by the customer.
Technician holding a temperature profiling device connected to a printed circuit board wrapped in protective yellow Kapton tape for reflow oven calibration.
Above is an example of a new PCB assembly rigged up with sensors and ready for profiling. We use this to optimise the temperatures in the reflow ovens. More on our PCB assembly testing services.
Technician operating a Saki automated optical inspection machine, checking printed circuit boards against design specifications on a computer screen.
Above is our Saki PCB optical inspection machine. We use Saki and Yestech machines for autonomously inspecting each board coming off a run against the golden board. We check for shorts and opens, solder joints and other joint defects with reference to IPC 610. We ensure the correct components are in place including polarity and location.
Printed circuit board secured in an electrical testing fixture with multiple probes for in-circuit testing.
Above is an example of an electrical testing device. More on electrical testing. We conduct in-circuit testing that checks for shorts and opens in the circuit board tracks as well as the values of basic components such as resistance, capacitance and inductance. These tests are typically conducted using a bed-of-nails tester supplied by the electronics designer.
Functional testing setup for printed circuit boards, with multiple boards connected to diagnostic equipment and measurement tools.
After uploading firmware, we conduct functional testing to verify the device is working as intended, using a testing system supplied by the designer. We can also stress-test the device by conducting these tests at high and low temperatures and cycling between these extremes. The environmental chamber can also test devices in high humidity conditions.

This rigorous system generates many traceability benefits. For example, if a component is sensitive to moisture, it is placed in a dry cabinet until it is ready to be used. When it is taken out of the cabinet, the reel is scanned and the time it is out of the cabinet is logged. In this way, if there is ever a problem with moisture sensitive components in the field, we can provide evidence that the component’s exposure to moisture before manufacture was fully controlled.

Another benefit is that the operator using the Cluso system is automatically logged. So we know which operator took a reel from storage and placed it in the pick and place machine. If there is an error with either the system or with the operator following procedures correctly, we can take corrective action – which is the essence of a quality system.

For more information on other aspects of quality systems required for electronic medical device manufacturing review our MedTech Manufacturing Services.

How to reverse Australia’s declining R&D spending?

Circuitwise CEO Serena Ross recently participated in a webinar organised by auManufacturing on “Towards 3% R&D”. The event was facilitated by auManufacturing’s editor Peter Roberts. Panellists included Jefferson Harcourt – Executive Chairman of Grey Innovation Group, Nicola Purser – Research & Development National Leader, BDO, and Dr John Howard – Executive Director, Acton Institute for Policy Research and Innovation and Visiting Professor, UTS Institute for Public Policy and Governance.

The event’s key theme was a discussion on the decline in Australia’s investment in research and development (R&D), which has declined significantly from 2.24% of GDP in 2008 to 1.68% today. Reasons for the decline ranged from macro-economic trends toward globalisation and Australia becoming a service economy, failure to bridge the historical industry-academia divide, through to shortcomings of government support systems, including the R&D tax incentive and inconsistency in innovation policy.

Panellists suggested Australia need to learn from successful initiatives launched by other countries and cited examples such as the US SBIR program which facilitates government procurement from small businesses, and Germany’s Fraunhofer Model where a government-funded institution partners with industry to commercialize research.

Companies like Tesla and SpaceX, which took decades to reach their current success, were cited as successes of long-term thinking in both government policy and private investment, and said the traditional short-term focus on immediate returns stifles innovation in Australia.

Serena’s main contribution was to call for a greater emphasis on internal R&D that focused on continual improvement to avoid reliance on risky deep-tech style innovation or the need to follow the strict R&D tax incentive guidelines. She cited Circuitwise’s inventory management system as a key example of its approach to “small, incremental” innovation and emphasised the need for an organisational culture that encouraged team members to suggest and drive their own automation initiatives.

You can read more about the Circuitwise approach in an earlier auManufacturing article and you can view the webinar, also via the auManufacturing website.

Rising to the Covid-19 challenge

Circuitwise Electronic Manufacturing is working to support our community and industry in this difficult time, as we deal with the fall out of the Covid-19 pandemic. We want to let everyone know our company is ready to offer whatever service is required to help combat the virus and to support businesses.

We are already working with our existing medical technology clients delivering essential equipment for hospitals in this time of stress. Such equipment includes sterilisation, radiology and remote healthcare.

Circuitwise is ISO 13485 certified to manufacture PCB assemblies used in active medical devices. Over the past week, we have been talking to several institutions and government agencies involved in the emergency development of medical equipment which is no longer available from overseas.

We are actively offering our services to initiatives underway and we want to extend a helping hand to manufacturers of medical equipment looking to ramp up or re-establish manufacturing in Australia.

Next Thursday 2 April at 4pm, we will be sponsoring and participating in a MedTech Hypotheticals: Fighting Covid-19 session hosted by the NSW Active MedTech Community.

In this webinar we will be exploring the details of rapid development of automatic ventilators. We invite you to join us in a discussion and how we could fast track the development of such equipment.

Working together we are strong – join our conversation.