5 Key Takeaways From electronica India 2026

5 Key Takeaways From electronica India 2026

Thousands of visitors. Hundreds of exhibitors. One light monsoon on the way in. After three days of connecting with customers from around the world and discussing their challenges at length, Smith left electronica India with a clear vision of what’s next for the semiconductor market.

2026 has been a tumultuous year. As the fourth quarter begins, companies are starting to look toward 2027 and strategizing around continued change and challenges. electronica India brought together procurement professionals and decision-makers from across the industry to discuss what’s happened, what’s happening, and what will happen to help solve the supply chain struggles that have defined the past year.

Throughout the conference, Smith’s team of experts spoke to customers, vendors, and thought leaders about what they’re expecting in the near future—and how we can help.

“Coming back to electronica India and getting the chance to meet with so many critical players in the industry has given us a chance to gain deeper insight into how we can better fulfill their needs,” said Mark Bollinger, Chief Administrative Officer at Smith.

These five takeaways reflect the current sentiments of the market as we approach 2027. As you prepare for the upcoming year, use these insights to develop and implement a robust procurement strategy and stay ahead of volatile market conditions.

1. Procurement teams need to prepare for extended shortage conditions.

Recent weeks have seen news reports about the slowdown of AI development, with the CEOs of both Anthropic and OpenAI advocating for it. But that wasn’t the tone at electronica India. Throughout the week, experts at the show were treating the ongoing memory shortage and AI boom as the new normal, at least through 2027.

“Everyone I talked to kept emphasizing the need to solidify their supply chain for the next year, at least,” said Nikhil Dahima, General Manager of Smith’s Bangalore office. “With the market conditions expected to continue as they currently are, conversations mostly centered around how we could help connect manufacturers with critical and hard-to-find parts for the foreseeable future.”

Despite some of the public discourse, data centers and AI continue to dominate the supply chain, with no signs of slowing down. September saw memory prices climb to record highs throughout the month, and shortages are starting to spread to the peripheral and passive markets, with server-focused MLCCs and networking solutions from Nvidia’s Mellanox division facing recent supply constraints.

Based on our conversations at electronica India, flexibility and redundancies are shaping up to be the keys to success next year. As procurement teams begin to prepare their plans for 2027, they need to anticipate the continued conditions and adjust accordingly. Despite the extended duration of the ongoing shortage, there is no end in sight.

2. Quality control has taken on increased importance during the shortage conditions—and will only become more important the longer they last.

One topic that kept popping up throughout the week was the rise in counterfeiting and the increased scrutiny manufacturers now require to ensure authentic parts. As companies grow more desperate to source hard-to-find parts, we have heard numerous stories about nefarious actors attempting to take advantage.

The longer these conditions last and the harder it becomes to find necessary parts, the more opportunity there is for counterfeit components to infiltrate the supply chain—and the more vital strong QC processes become. Companies need to conduct comprehensive evaluations of their suppliers to ensure their sourcing, testing, and inspection processes will effectively mitigate the risk of counterfeit parts.

“Authenticity testing has always been critical in our industry, but it’s never been more critical than right now,” said Mark. “I spoke to quite a few suppliers and manufacturers who mentioned catching far more counterfeits over the last year than they’re used to. It’s been much more pronounced than in shortages past.”

With the industry expecting the ongoing supply constraints to last through next year, it will be crucial to continue evaluating your quality-control processes across the full scope of your supply chain to stop counterfeiters from affecting your business.

3. Flexible inventory management is replacing just-in-time sourcing.

Throughout the week, our conversations kept naturally turning back to how everyone has adjusted to the shortages. And it quickly became clear: The companies that have weathered the storm the best are the ones that had robust inventory ahead of the market turn or the flexibility in their supply chains to adjust early.

While just-in-time inventory management works well in ideal conditions and looks good on a balance sheet, the current market conditions show why flexible sourcing and holding more inventory seem to be the future of the semiconductor industry. Even beyond the current cycle, the number of shortages has been on the rise recently, with six in the past five years alone. Holding more inventory comes with some costs, but it will save money in the long run as prices increase for critical parts.

When talking to companies that have felt the effects of this year’s turmoil the hardest, almost every one of them talked about the rush to add inventory early in the year and the strain the tight supply conditions were placing on their production lines. Conversely, the companies with strong inventory programs dating back to 2025 or earlier certainly mentioned concerns about declines in their on-hand inventory, but very few talked about production disruptions related to the shortages.

Looking forward, companies are going to need more varied and flexible alternatives for ensuring their stock. Suppliers who can offer bespoke programs such as vendor-managed inventory or unique financing options are going to be better able to support their customers’ needs as shortage conditions become the new norm across the industry.

“Inventory concerns have been—and will continue to be—the defining challenge of the market this year,” said Nikhil. “VMI, financial flexibility, and even excess-inventory solutions all offer interesting and profitable opportunities in shortage conditions. The longer these shortages go on, the more valuable these advanced capabilities will be.”

4. Advanced knowledge of the market is the biggest key to success.

Later in the conference, talk began to shift away from the memory shortage and more toward potential future shortages. The specific parts manufacturers were concerned about varied by industry (though passives in general were frequently mentioned due to the rise of the MLCC shortage), but they mostly wanted to know what we were seeing on the open market—what parts are starting to see supply concerns and which OEMs are changing their allocation planning.

Given the rapid snowballing of the memory shortage earlier this year, companies are trying to figure out what the next shortage is going to be so they can prepare early and build up their inventory. The more insight into the entire landscape you have, the better equipped you are to futureproof your production ahead of any potential disruptions and stay a step ahead of the competition.

“Knowledge is power in our industry,” said Nikhil. “Being better informed than your competitors gives you more time to prepare and more options to choose from. Advanced market intelligence is how you can secure a steady supply of critical components to sustain your business through tumultuous times.”

OEMs have deep knowledge of their niches, but open-market suppliers have a broader view of the market. As the semiconductor industry becomes more intertwined across regions and sectors, having this global vision allows independent distributors—and their partners—to better anticipate headwinds and adjust accordingly.

5. A Diverse Supply Chain Will Make Procurement Easier—But Not Easy

Throughout electronica India, the overarching theme of almost every discussion was the ongoing shortages of this year—how to prepare, how to adjust, and how to protect against them as they continue. As the industry becomes increasingly interconnected—and increasingly complex—procurement professionals are going to need a diverse and robust supply chain to ensure the next shift that cascades across the market doesn’t cause the same struggles all over again.

Smith offers flexible support to help you overcome any current—and future—disruptions to your production plans. We have offices around the world and serve a wide variety of industries across the electronics space, giving us the vision needed to help you prepare for 2027.

Reach out to your Smith representative to reinforce your supply chain and support your procurement efforts moving forward!

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