COVID 19 Strains Contract Manufacturers: What’s the Solution?

By Logan Wamsley

The impact of the COVID-19 pandemic on the electronics manufacturing industry has not yet been fully revealed, but as the days continue to pass, we better understand just how broad the implications are. All aspects of the supply chain are experiencing strain, and the time has come where cost-saving solutions have not just become desirable, but necessary.

One particular point of strain can be found with contract manufacturers. In a standard economy, the long-term storage of electronic components is always a contentious topic. With distributors unable to hold inventory for extended periods of time, and OEMs not equipped to properly warehouse it, OEMs may sometimes turn to contract manufacturers whose already tight margins put them in no better position to hold inventory for their customers than the OEM is. This puts the OEM in the awkward position of having no place available to hold the components they’ve purchased.

With the closing of air and shipping lanes around the world, this problem has only been amplified. Contract manufacturers, placed in a tight corner, will often agree to hold inventory on behalf of their customers, but at a cost that usually amounts to over 10 percent the original cost of the component. Not only does this put added cost pressure on the OEM, but this means the contract manufacturer must sacrifice finite space that otherwise might be used for more manufacturing.

Especially during this difficult time, OEMs will require the use of an outside party to properly store irreplaceable and sensitive electronic inventory without adding additional strain on their contract manufacturing partners.

The Partstat Semiconductor Storage Solution is one such option. Far from being a storage facility, Partstat’s one-of-a-kind storage environment, located in Orlando, FL, offers wholly unique features including:

• The industry’s only custom storage vault, featuring Fire Rated Class 350 Certification, a Zone IV Seismic rating, magnetic shielding, and full ESD protection — everything required to ensure business continuity for even the most sensitive electronic inventory.

• Full die & wafer banking capabilities, featuring industry-leading self-regulating drying technology that allows for maximum access to die and wafer inventory.

Specialized electronics handling with ESD and MSL process and protocols, as well as adherence to JEDEC standards.

Global fulfillment including full picking, packing, and shipping capabilities.

By recommending Partstat, contract manufacturers can present a unique value-add to their customers, especially given contract manufacturers’ typical reluctance to offer long-term storage options. It allows them to stand out from competitors, and it shows customers that they come first, in all respects, without the need to dedicate additional warehousing space and resources. Especially during this difficult time, such services are poised to resonate with equipment manufacturing customers more than ever before.