As the components that pull two connections together to complete a circuit, and that use electrical currents to turn devices on and off, respectively, relays and switches are two electronic products that are seeing healthy demand in 2015. For example, Robyn Jenzen, a project specialist with electronic contract manufacturer Quantronic Corporation in Minneapolis, says her firm is using more relays and “about the same” number of switches when making its products. She says supply for both components was good during the first quarter of 2015.
“I have been noticing that many of the larger/catalog houses have these items in hefty supply,” says Jenzen, “while some of my other suppliers have varying inventory.”
Jenzen says she is facing some challenges in the ICs/BGA chip arena, where such products are going on allocation.
“I hadn't heard that word in quite some time until recently,” she explains. “It seems that customers whose designs take two to three years to complete already have several items that are obsolete or experiencing allocation and it typically affects these types of components.”
By the Numbers
In the most recent TTI, Inc. MarketEye report on the North American switch market, Michael Schwert of Cumulus, Inc., said sales were down 1% and bookings decreased by 4% during the first three quarters of 2014 (compared to the same period in 2013). Total reported sales for all switch categories in North America during the third quarter were 1% more than the previous quarter and 5% below the third quarter of 2013.
Through the third quarter of 2014, relay sales were up 3% and bookings for relays were unchanged as compared to the same period in 2013. According to TTI, total reported sales for all relay categories in North America for the third quarter of 2014 were 2% higher than reported in the previous quarter and up 8% from the same quarter of 2013.
In terms of relay and switch availability, Jenzen says relays appear to have heavily extended lead times compared to this time last year or even two years ago.
“Switches have always had a lead time if not in stock,” she points out, “but it's always been workable and I haven't noticed any changes regarding that.”
On the pricing side, Jenzen says relays seem to have an increased cost as of late.
“We have specialty, discount, or last-line pricing with all of our suppliers, so oftentimes price increases are minimal for us,” she explains. “However, I have noticed pricing increase significantly on relays and other complex components—sometimes as much as 30 percent.”
In assessing Quantronics’ anticipated needs for relays and switches over the coming months, Jenzen has picked up on a significant increase in requirements for FBGAs and VFBGAs.
“That being said, most of the time they are in stock or I am able to track down stock through … when our authorized distribution is having capacity or lead time issues,” she says.
“Typically, prices increase across the board on components with all suppliers in the months of March and April,” says Jenzen. “There is usually very little warning, but with my experience, I know it will happen shortly.”
She expects to see the biggest increases in larger ICs, BGAs, and relays, with a possibility that specialty resistors will see an increase as well, “from what I've been told by several suppliers.”