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September 24, 2021

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Labor shortages hit electronics firms

Nearly four in five electronics manufacturers say that it has become harder to find qualified workers, compounding problems from an ongoing chip shortage and causing delays in shipping products, a trade group representing them said yesterday.

IPC, which represents contract manufacturers such as Foxconn, chipmakers such as Intel Corp, circuit board makers and other industry players, said about 80 percent of respondents in its most recent survey said they were having trouble finding workers. More than two-thirds of the companies surveyed said that their labor costs were also rising.

The labor woes come at a time when the industry is also dealing with a global chip shortage that started last year. More than half the respondents said they did not believe the chip shortage would abate until at least the second half of 2022, with 90 percent of the companies saying their overall materials costs, which also include non-chip items, were rising.

The result had been increased delays and shrinking profit margins, the survey said. Less than a quarter of the companies surveyed said their profits were growing, with nearly a third saying they expected margins to shrink. And some 88 percent of companies said their lead times — the delay between receiving an order and fulfilling it — was going up, sometimes to as long as two months.

Shawn DuBravac, chief economist at IPC and lead researcher on the study, said the labor shortages were worst in North America and Europe, and electronics manufacturers would likely have to go beyond raising wages, which 44 percent said they were doing, to attract workers.


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