Omron Electronics' G9T AC latching power relay targets smart meter applications.The good news for electromechanical relay (EMR) buyers is that suppliers expect stable lead times and pricing in 2013. The potentially bad news is that they have real concerns about maintaining the right balance between production capacity and demand. This is a result of dealing with component shortages and high inventory levels over a relatively short span of two years.

EMR manufacturers report that lead times have stabilized in the 10- to 13-week range. However, deliveries for some EMRs are shorter—in the six-to-eight week range, say suppliers. This is slightly improved from last year's average lead times of 8 to 16 weeks.

“We had a strong book-to-bill ratio through most of 2011, which began to deplete in 2012, and now we're correcting in 2013,” says Matt Marciniak, director of product management, Strategy & Business Development, TE Relay Products, Bensheim, Germany.“Most suppliers have caught up with backlogs that they had lingering from the days of allocation,” says Jason Lipps, product marketing specialist, Omron Electronic Components LLC, Littleton, Colo. “Everything is rightsized to where they have resources in place to bring those lead times down to normal.”

The roller-coaster ride in the supply chain over the past two years has caused many component suppliers to re-think their production capacity and resource level strategies.

“Starting in 2010, and through 2011 and part of 2012, we had a real kick to the supply chain in over-ordering to under-ordering from the normal moving average,” says Matt Marciniak, director of product management, Strategy & Business Development, TE Relay Products, Bensheim, Germany. “We had a strong book-to-bill ratio through most of 2011, which began to deplete in 2012, and now we're correcting in 2013.”

“The concern is [that] are we going to go through another major shock where we see this large swing, and if so, how do we prepare for that?” adds Marciniak. “Or are we going to see a return to normalcy on how the supply chain works to signal how many products we need to make, and better prepare for a normal growth market.”

Marciniak says TE Relay Products works hard at creating a flexible manufacturing base so it can “absorb, to a certain degree, fluctuations in the market. Most of our products have very long life times, so we have to plan for that capacity as well as to incrementally add to it over time on a cost-effective basis.”

"Most suppliers have caught up with backlogs that they had lingering from the days of allocation, and everything is right sized to where they have resources in place to bring those lead times down to normal," says Jason Lipps, product marketing specialist, Omron Electronic Components.This also means that buyers need to keep an eye on product lifecycles. Over the past few years, EMR manufacturers have continued to consolidate product lines due to cost issues.

Looking ahead, Lipps says there will be continuing challenges in terms of rightsizing production capacity.

“As far as rightsizing and getting resources in place, it's a matter of understanding the market we're in today,” he says. “We don't see any new end products or technologies coming out that will drive demand or a drastic increase in demand for EMRs. There isn't that killer app out that will throw the supply-demand equation out of sync.”

Most EMR manufacturers expect growth in the low-single digits in 2013. Some of the demand drivers include building automation, lighting controls, HVAC controls and appliances. Emerging growth markets include renewable energy (primarily solar), electric vehicle (EV) battery chargers, and smart meters.

Although the EMR relay market typically grows at an annual rate of three percent to five percent, TE Relay Products is expecting above-average growth over the next 18 months. Marciniak says it's because of how TE is positioned in the market and the markets it targets, including automotive and industrial.

“We're seeing some positive signals in the industrial market,” he explains. “The contraction that we saw in the market last year was somewhat of an inventory correction because a lot of business will flow through the distribution channel due to all of the small customers.”

“We anticipate much more growth than last year because we see a lot of new design activity, particularly in appliances and industrial applications," says Jane Awittor, product engineer, Panasonic Electric Works Corp. of America, Secaucus, N.J.“We anticipate much more growth than last year because we see a lot of new design activity, particularly in appliances and industrial applications,” says Jane Awittor, product engineer, Panasonic Electric Works Corp. of America, Secaucus, N.J.

Similar to some passive components, power is where the action is. EMR manufacturers agree that power latching relays are in high demand, particularly as energy efficiency continues to be a key issue globally.

"Low power consumption is driving demand for power latching relays," says Lipps.

There is a lot of activity for latching power relays in lighting controls to conserve power, agrees Awittor. Panasonic's DW latching power relay targets applications that call for energy savings, including smart meters, home appliances and industrial equipment.

Awittor also sees growth potential in the solar market. Panasonic offers two new relay lines—the LF-G and HE-PV—for solar applications, and expects to expand these lines to meet demand in the renewable energy market.

Other tech trends include the need for quieter relays in vehicles, specialization in appliances, and integration of relay functionality for industrial applications, says Marciniak.