close

Chip crunch hampers UK availability of foodservice equipment

Electronics

Operators have been warned that supply disruptions could drag on for many months after the industry’s largest combi oven maker said it was unable to fulfil orders of its new product line in the UK until next year.

Supply chain woes have hampered the market in recent months, with commentators insisting the situation would have been dramatically worse had manufacturers not built up so much stock ahead of Brexit.

Shortages have driven up stainless steel prices across the world while component availability issues have left manufacturers scrambling to source the parts they need to maintain production schedules.

Story continues below
Advertisement

One major global manufacturer told FEJ this week that established relationships with components supply partners were being strained. It has informed some components suppliers that it does millions of pounds worth of business with each year that it will have no choice but to source elsewhere if commitments can’t be met.

A severe shortage of electronic components appears to be the most pressing issue facing manufacturers right now.

Most modern foodservice equipment contains electronic controllers, but semiconductor manufacturers diverted so much inventory into the consumer electronics sector during the pandemic that attaining chips is proving difficult.

At the same time, the foodservice industry is competing for product with much larger industrial sectors, such as automotive, where production levels are ramping up again.

In its latest set of quarterly results, Rational described the supply situation for primary products as “tense”.

Its revenues globally are now back up to the level they were before the crisis, but it warned that getting hold of electronic parts for its ovens remained a challenge and could impact future sales.

It stated: “The current situation in the global market is very tense, especially for electronics components, and considerable supply delays and volume restrictions may persist, leading to longer delivery times and later revenue recognition. What is more, the tense supply situation is in some cases leading to dramatic increases in component prices and shipping costs.”

Concerns that chip shortages could prolong equipment delivery times have already materialised for Rational’s UK subsidiary, which places orders with the company’s main factory in Germany.

FEJ’s sister title Catering Insight reported yesterday that Rational UK had notified distributors that it won’t be able to fulfil new orders for its iCombi Pro combi ovens for the rest of the year.

In a letter sent to partners it explained: “The global market is experiencing constant supply bottlenecks for processors. This means that our suppliers are also experiencing delays, which has a major impact on Rational’s usual short delivery times.”

Rational UK stressed it was facing no issues in terms of service parts and accessories.

Earlier this year, analyst firm Gartner said the worldwide semiconductor market was unlikely to recover to normal levels until the second quarter of 2022.

The chip shortage started primarily with devices, such as power management, display devices and microcontrollers, fabricated on legacy nodes at 8-inch foundry fabs, which have a limited supply.

The shortage has now extended to other devices, and there are capacity constraints and shortages for substrates, wire bonding, passives, materials and testing, all of which are parts of the supply chain beyond chip fabs.

Kanishka Chauhan, principal research analyst at Gartner, said: “The semiconductor shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021. Foundries are increasing wafer prices, and in turn, chip companies are increasing device prices.

“Across most categories, device shortages are expected to be pushed out until the second quarter of 2022, while substrate capacity constraints could potentially extend to fourth quarter of 2022.”

EXCLUSIVE: Turbulence in catering equipment supply chain keeps industry awake at night

Tags : chipsdisruptionelectronicssupply chain
Andrew Seymour

The author Andrew Seymour

Leave a Response