Article author: Steven Las Marias
Getting great parts, being able to test and certify them, and getting the product finished in the shortest possible time is a key proposition for Fusion Worldwide’s customers.
Significant initiatives being implemented by governments around the world, including incentives, tax rebates and subsidies, are expected to boost the adoption of electric vehicles (EVs). This is consistent with efforts to curb carbon emissions as part of a net zero target.
According to market analyst firm Precedence Research, the global electric vehicle (EV) market is estimated at $170 billion in 2021 and is expected to surpass $1.1 trillion by 2030, with compound annual growth during the forecast period. rate (CAGR) recorded 23.1%. Fueling this growth is increased investment by major players to electrify their vehicle lineups.
Precedence Research notes that Asia will dominate the global EV market in 2021. In fact, China alone accounts for almost half, or 45%, of global EV sales. Other countries such as Japan, South Korea and India are also opportunistic markets amid government investments to boost EV production and sales, according to market research firms.
However, according to Marcus Chen, vice president of Asia-Pacific at Fusion Worldwide, trends in Southeast Asia appear to have picked up over the past 12 months. Based in Singapore, Chen leads his Fusion sales team in the region, engaging with customers, finding out what they need and helping them solve problems in their supply chains. increase.
“Global EV trends have rebounded significantly, and EV trends in Southeast Asia have risen exponentially over the past 12 months,” Chen said. “Singapore, for example, aims to develop a greener and more sustainable land transport sector through its national vision, the Green Plan 2030. Part of this plan is a strong impetus to electrify the total vehicle population, both public and private, thus supporting Singapore’s goal of 100% clean energy vehicles by 2040. doing. This EV push has already started in Singapore and is expected to gain momentum as the Southeast Asian region accelerates the continued growth of EVs in the coming years. ”
Responding to parts supply issues
As traditional internal combustion engines (ICEs) migrate to electric systems, new electronics requirements arise. According to Chen, this transformation requires major changes throughout the car’s design.
“These traditional ICE parts are no longer needed in EVs, as the use of electronic components to support the vehicle’s electrical functions has increased significantly. Multilayer Ceramic Capacitors (MLCCs) would be required, but today’s EVs require an average of 12,000 to 18,000 MLCCs for both the vehicle and the battery, which is a sixfold increase in the number of MLCCs required. It means increased,” Chen explains. “The cost of ICs and semiconductor components for EVs is also projected to jump from $600 to $3,000 per EV, meaning the value of the electronic components used has increased fivefold. This will further increase the demand for semiconductors in the market as the volume of EVs expected to hit the market in the next few years will increase.”
The EV trend is expected to face challenges going forward, especially in terms of parts sourcing, as problems with parts shortages persist. In fact, the car production line here he has been closed for a year or two due to lack of parts.
Fusion Worldwide is the world’s leading independent public market distributor with headquarters in Boston, Massachusetts, USA, and 18 offices throughout the Americas, EMEA, and Asia Pacific. For over 20 years, the company has helped customers solve imbalances in their supply chain.
“As an independent open-market distributor, we offer our customers world-class sourcing services,” says Chen. “One of the biggest challenges facing EV manufacturers over the last 18 months was the shortage of semiconductors to meet the growing demand for EVs. We have cultivated relationships with distributors that manufacturers may be short of.These established relationships, coupled with our advanced sourcing capabilities, It helps our customers make up for the shortfall.”
If there’s a particular semiconductor that’s stopping production on an entire line and a manufacturer needs to source it, they can come to Fusion.
“At Fusion Worldwide, we support our customers by finding the products they need to keep their production lines running,” adds Chen. “We serve a wide range of different markets, such as storage, consumer electronics and telecom segments. Over the past 18-24 months, we have witnessed rapid growth in our business in the automotive industry, especially in the EV sector. Ok, and one of the biggest reasons these companies come to us is our ability to ensure high quality standards.Customers of both conventional and EV vehicles are in the current market. , we are beginning to realize that Fusion is one of the few suppliers who can get the components we need.”
Strengthen capabilities with in-house test services
According to Chen, quality parts are essential for automakers. Few independent distributors have the ability to test parts for their customer and ensure they are 100% authentic to him.
“At Fusion, with our extensive library of golden samples and our in-house quality testing facility, we can certify and validate any part our customers need,” says Chen.
Earlier this year, Fusion Worldwide acquired Prosemi, one of Singapore’s largest electronic component test houses. This is because we recognized that the ability to test our components is an important part of our business and a key area our customers rely on.
“As semiconductor shortages accelerated through 2021, the market faced multiple bottlenecks in component testing among a handful of test houses around the world, with turnaround times ranging from 3-4 days to 5-6 weeks.” explains Chen. “We have made the strategic business decision to acquire He Prosemi to support our in-house test facility. was able to provide one week.”
Chen added that Fusion’s ability to quickly source, test and certify parts is part of the main reason automakers have been able to overcome parts shortages.
Reduce procurement risk
In the current supply chain situation, electronics manufacturers face risks such as counterfeit components when trying to protect components outside the supply network.
“One of the risks we often see is product testing and certification,” says Chen. “This has been the number one concern and priority for many of Fusion’s customers throughout the component shortage. As shortages continue, customers are biting the bullet and buying parts from unverified and unqualified sources. and it is impossible to test whether those products are genuine and authentic.
Chen points out that this is the biggest risk. Because one substandard component can have a negative impact on a manufacturer’s entire electronic product. For example, it can damage multiple circuits in the process or his entire PCB.
“Fusion strives to ensure that our customers are completely free of this risk. That is why we only buy from genuine, qualified and vetted sources. We can make sure the parts from the factory are fully functional before we ship them to our customers,” says Chen.
Another risk that Fusion Worldwide has consistently experienced throughout COVID-19 is lockdowns. “Whether it’s a specific region being locked down or a component manufacturer shutting down an entire production line, supply will inevitably be affected, causing major disruptions across the market,” says Cheng. “There may be light at the end of the tunnel when it comes to lockdowns, but given how the industry has changed over the past two years, I think things are still a long way from getting back to normal. .”
Light at the end of the tunnel?
As markets around the world move into a “new normal” and chip makers expand factories and ramp up production capacity, component supply issues are expected to begin to stabilize.
“Six to nine months ago, all components and manufacturers were facing supply issues. However, some brands and product lines are seeing improved lead times. “Although we are in the stage and market availability is improving, niche products such as FPGAs, chipsets and automotive grade products are still severely constrained.”
As for the auto industry, Chen said he expects the market to fill the deficit by the end of 2023. It’s probably not until the end of 2023, when supplies will return to normal and shortages will be less severe than they are now,” he says.
However, the overall outlook for semiconductor manufacturing in the ASEAN region next year is difficult to predict.
“Some industries, especially the consumer segment, will not see as much demand in the last two years,” Chen said. “While the PC segment has been sluggish for several quarters, there are some segments that we believe will continue to perform strongly, such as industrial segments factory automation, 5G and IoT connectivity. We predict that the next two to three years will be bright.”
“When it comes to the automotive sector, there is definitely room for growth. Consider Vietnam’s VinFast, one of Southeast Asia’s largest automakers, and they are steadily picking up pace, shipping their first 5,000 vehicles to the U.S. They are turning Southeast Asia into an EV or vehicle manufacturing hub. While there is still work to do in terms of moving to
Stephen Las Marias is editor of EE Times Asia.could reach him email@example.com.