How global chip shortage affects Absolute Cycling

The Covid-19 crisis caused large delays in electronic components resulting in a global chip shortage. How does this affect Absolute Cycling?

How the global chip shortage started

Early 2020, when Covid-19 started to expand around the world, companies like Volkswagen and Toyota cancelled their orders at chip manufacturers. The fear of declining sales and therefore too large stocks increased as renowned consultancy agencies predicted a drop in sales. The idea to order again when it is needed, wasn’t the best strategy. 

As a result of that same Covid-19 crisis, the demand for chips from other sectors increased enormously at about the same time. All equipment related to working from home has been flying off the shelf for a year now. Every business who needs chips is in panic and terrified of being saddled with shortages. This drives demand even further, which pushes the prices and extends the delivery times by eg. Apple, Samsung and Tesla.

global chip shortage affects absolute cycling

How does it affect Absolute Cycling

As a startup we are working hard to get the first Absolute Cycling One bike computer developed, produced and on the market by the end of the year. Obtaining computer chips has become a big challenge. Absolute Cycling is too small yet to order large amounts of chips and components to enforce delivery. We have to join the back of the queue, but we are constantly aligning with our partners trying to have components on time and looking for opportunities. 

Absolute Cycling Chip crisis

Full focus on supply chain

To have full focus on the supply chain, we welcome our new team member Arjen Verbree. He is responsible for sourcing the right materials on time with the right numbers and according to best quality standards. This includes optimizing the supply chain from main boards to displays and batteries. Arjen has years of experience in software development projects focusing on supply chain optimization. He is in close contact with all the suppliers and manufacturers of the Absolute Cycling eco-system making sure our business goals can be met. Two years ago we chose to have our production partners in the Netherlands: close to Absolute Cycling’s HQ. This allows us to discuss easily and have the possibilities to adapt quickly when necessary. 

Arjen Verbree Absolute Cycling
Arjen Verbree, Absolute Cycling’s Supply Chain Manager

Overseas components

Components like chips, displays and batteries aren’t made in the Netherlands and have to be ordered elsewhere. We try to have a grip on the orders as much as possible. We can’t predict how the global chip crisis evolves in the coming years and what the exact impact is for Absolute Cycling and the production of the A-One bike computer.

Market introduction

We are confident that with our current team and the flexibility of both our suppliers and manufacturing partners, we are still flexible to adapt to new situations if necessary. However the global chip shortage makes it difficult for us to reach goals on time. We are working hard to maintain these goals, but we also have to be realistic that the shortage of components might cause further delays and influence the market introduction before the end of the year.

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