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Global microchip shortage affects business

Microchips make modern electronics work. The electric circuits of the tiny devices are needed to fuel devices across industries, including cars and smartphones. According to a survey from the U.S. Department of Commerce, demand for microchips was up to 17% higher in 2021 compared to 2019. The survey found that inventory fell due to supply chain disruptions during that time. The result is a high-demand, low-supply market for microchips.

Apex’s client, a lower middle market private equity (PE) firm, approached Apex for help with a microchip shortage affecting its portfolio company, a leader in quick-turn PCBA and on-demand manufacturing. The PE firm was looking to Apex Leaders to connect it with an advisor who could help solve the immediate need and create a plan for the future.

Apex’s process starts with a comprehensive intake call. During this call, the PE Client expressed interest in connecting with current leaders of a global electronic components distributor. Apex suggested also contacting former employees of the microchip distributor. By connecting with both current and former employees, the PE firm and its portfolio company would be able to gather a range of insights pertaining to potential strategies to resolve the parts shortage with the existing supplier, understand the supply chain challenges more fully, and formulate a longer-term strategy for supplying these critical components.

Building strong relationships

The Apex team has a wealth of knowledge and experience in the industrials sector and has built strong relationships with executives and operators in the space. Leveraging this knowledge and its vast network, Apex introduced the PE firm and portfolio company to a retired senior executive of the requested company.

Through collaboration with the former executive, the clients’ portfolio company mitigated its urgent sourcing challenge and obtained valuable input to help inform its longer-term sourcing strategy.

Helping clients grow their portfolio companies

At Apex Leaders, we support our clients throughout the investment lifecycle – exploration, evaluation, and post-acquisition. Our services extend to your portfolio companies at no additional cost as part of your partnership with us. We use the same bespoke process to match management teams with expert advisors that can provide key insight and can assist in developing growth strategies to increase value.

Connect with us to learn more about how we can help you advance your portfolio companies.