Many buyers are gleeful about current electronics supply conditions. Parts that were on allocation last year are now readily available and prices are falling. The biggest problem some buyers have is managing their excess inventories.

But experienced buyers know these conditions won't last. While capacity was added in 1999 and 2000 because of rising demand, little capacity investment is taking place in 2001. A lot of previously planned capacity expansion has been put on hold. That, of course, means when demand picks up again, which could be as early as the third quarter, there won't be enough capacity in place to meet everyone's requirements. Purchasers at small and medium-sized OEMs and contract manufacturers will be the first to feel the pinch.

This is a good time for those buyers to start planning for the next shortage market. Savvy buyers with a long-term view are working closely with manufacturers and distributors of their key components and not beating them up on price in this oversupplied market.