Lead Time Alert: Raw material shortage for power supplies, Shortage of containers, Port Congestions, Copper prices reached a new high, Labor Shortage, Covid cases again in China

Dear Valued Customer,

Please see below information about trends in the global market that are impacting lead times.

1. Raw material shortage for power supplies:

Electric Vehicle(EV), Artificial Intelligence(AI) and 5G Network segments are quickly ramping this year, increasing demand, which has led to raw materials shortages, extended supply lead times and price increase on MOSFET, MLCC, etc. MEGA is working hard to secure these materials to limit the allocation and extended lead time effect, but we predict lead times will extend throughout 2021 and highly recommend you place orders in advance to minimize the impact. MEGA’s second power supply factory will be coming online in the Philippines later in 2021 and will mirror our current facility in China , which will help reduce our lead times.

2. Copper has seen a historic price increase (see chart below) and is forecasted to reach 4.40/lb in 2021. You can avoid the continuing increases in power cord costs by entering into a blanket order, which locks in the copper rate at the time of the order and maintains the price for the duration of the order. To further combat price increases, we have the ability to shift some production from China to the Philippines to avoid the current tariffs. As the copper price continued to rise we have built up our stock of finished power cords to be ahead of the increase.

3. Labor Shortage are occurring due to an increase in Covid cases globally and the Chinese New Year holiday in China will see employees leaving earlier and returning later. Hopefully, a successful role out of the vaccines will limit the impact by the end of Q2 2021.

4. Shortage of shipping containers and port congestion are causing global delays. Empty containers are building up in US ports as the import traffic exceeds exports.  The shipping lines are instituting a $2000 container increase effective February 1, 2021 from Asia, nearly doubling the cost of transportation from six months ago

MEGA Electronics remains committed to taking all possible steps to work with you to minimize disruption during these difficult and uncertain times. Please speak with your sales representative to discuss how we can assist your company.

Best Regards,

Manfred Schwarzinger

Director of Global Sales

Mega Electronics, Inc.
4B Jules Lane
New Brunswick, NJ 08901
Tel. 732-249-2656
Fax. 732-249-7442
E-mail address: manfred@megaelectronics.com
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MEGA ELECTRONICS | (732) 249-2656