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Jabil's Global Commodity Intelligence Archive
Q1 2022
Jabil's Global Commodity Intelligence Archive
Q1 2022
Executive Summary
Q1 2022
Welcome to the first edition of the Jabil Procurement Intelligence Report in 2022. Clearly this past year has been driven by an unprecedented demand rebound across almost all technology segments, creating severe pressure on global markets to respond. With insatiable demand coming from the economic stimulus implemented by many economies, to consumer confidence, along with dynamic changes in the work environment, the supply side has struggled to keep up. In this issue, we will share our insights and projections for the coming year across a broad range of commodities.
As we look ahead, one common denominator is the continued impact of COVID and the challenges it creates with unplanned disruptions across many global manufacturing facilities. And we can’t discount the continued impact to global freight and logistics, both in time and escalating costs. Even as we adopt and evolve to respond to these disruptions, the overall impact to our supply remains constant…. longer lead times and increased material costs. As suppliers add capacity to respond to demand, many of these investments will take time until we realize the incremental output and reduced global supply issues.
Here is a quick snapshot of our forecast looking forward to 2022:
- Electronic Components - for some commodities, we’ll realize the benefits and impact of new capacity which should loosen up some constraints in the second half of the year. However, for complex semiconductors, analog products, frequency control and some resistor families, limited supply and price increases may continue through ALL of 2022 and into 2023.
- Global Freight and Logistics – all modes of freight (air, ocean, and ground) continue to be impacted by COVID and the ongoing new outbreaks (i.e., Omicron) along with rapidly changing government protocols, especially in Asia. This continues to stress global supply chains requiring increased visibility and working capital to keep production lines flowing. We expect these conditions to be prevalent for the foreseeable future.
- Raw Materials – Although pricing may have peaked for many of the foundational materials used in electronics, such as gold, silver and copper, the forecast is that most material costs will remain at these elevated levels throughout much of 2022. For those commodities with high exposure to raw materials, PCBs, interconnect and certain passive devices, suppliers have been passing along these increases to all of their customers throughout the year and will likely continue into 2022.
With the backdrop of tight supply taking us well into 2022, we will continue to respond by increasing visibility to our suppliers (in some cases over 52 weeks), by developing new qualified suppliers in support of our overall demand and increased lead times based on these market conditions.
Our teams continue to work tirelessly to address all these disruptions while mitigating supply risk and minimizing cost increases, wherever possible. Thanks for your support over the past year, as we plan for the challenges and opportunities in 2022!
Graham Scott
Vice President, Global Procurement
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