CE Pro July 2021 - 48

CE PRO DISTRIBUTORS GUIDE 2021 | Industry
'Extreme Price Gouging,'
Supply Shortages
Crisis Hits the
Industry...
What to Do?
Manufacturers and distributors
say supply chain problems
will likely persist for a year.
Integrators offer tips on how to
effectively cope.
By Jason Knott
IT WAS ONLY a
matter of time before
the supply shortages
aff ecting the entire world of
electronics began to hit the
custom electronics space. A
devastating fi re at the
Renasas semiconductor plant
in Japan destroyed nearly
two dozen machines that
help provide the microchips
used in everything from cars
to alarm clocks to smart
home control panels. At the
48 | CE Pro July 2021
same time, manufacturers
had ramped down production
in anticipation of low
demand during the coronavirus
shutdowns, only to play
catch-up when demand
spike for home improvement.
Suppliers, distributors and
integrators are taking note of
the problem.
Recently, Savant informed
its integrators via its
Basecamp communications
platform that it was initiating
a 10% price hike in most of
its product line. Speaking
on the condition of anonymity
with CE Pro, another
manufacturing executive
says his company is already
experiencing " extreme price
gouging at the sub-component
level " from their various
suppliers. In some cases, they
are asking for a 30% premium
to deliver sub-components.
That same manufacturer
predicts supply and demand
will not reach an equilibrium
for at least one year ... so this
problem is not going away
any time soon.
Integrators are left
between a rock and a hard
place, with proposals out to
clients with specifi c pricing
only to fi nd that the
products are not available or
more costly. One integrator
says he exhausted every avenue
he could think of to fi nd
an AVR, only to strike out
with every brand and every
distributor. Integrator message
boards and social media
channels are fi lled with
messages seeking products.
Sonos products appear to
particular be in short supply,
which was affi rmed recently
during its quarterly conference
call with investors.
Sonos CEO Patrick Spence
noted, " We and others
across the industry are
seeing signifi cant increases
in constraints on a variety of
components. Our team continues
to work tirelessly to
mitigate as much as we can
to deliver on the incredible
demand we see. We appreciate
that our customers have
proven that they will wait for
our product, which is continuing
to help us navigate
through this challenge and
deliver tremendous results.
cepro.com
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CE Pro July 2021

Table of Contents for the Digital Edition of CE Pro July 2021

CE Pro July 2021 - Presentation
CE Pro July 2021 - Cover1
CE Pro July 2021 - Cover2
CE Pro July 2021 - 1
CE Pro July 2021 - 2
CE Pro July 2021 - 3
CE Pro July 2021 - 4
CE Pro July 2021 - 5
CE Pro July 2021 - 6
CE Pro July 2021 - 7
CE Pro July 2021 - 8
CE Pro July 2021 - 9
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CE Pro July 2021 - Cover3
CE Pro July 2021 - Cover4
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