In a recent development, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced on October 9, 2025, in the Federal Register that it has added two China-based subsidiaries of Arrow Electronics—Arrow China Electronics Trading Co., Ltd. and Arrow Electronics (Hong Kong) Co., Ltd.—to the Entity List. This event has quickly become a hot topic in the electronics manufacturing sector, particularly concerning supply chain disruptions. As Tortai Technologies (specializing in PCBA/EMS manufacturing), we are closely monitoring this, as it directly impacts the procurement and delivery of key components like those from Texas Instruments (TI). Drawing from public information, this article analyzes the event’s background, impacts, TI’s potential responses, and practical guidelines for clients and manufacturers. We hope this helps you navigate risks and highlights how we support resilient supply chains.
1、Event Background: Facts and Clarifications
The BIS decision stems from allegations that these Arrow subsidiaries procured U.S. technology for Iran, used in drone components (indirectly supporting groups like Hamas and the Houthis) [Sources: BIS official announcement, Reuters reports]. This is not a blanket sanction on Arrow’s parent company but targeted export controls on these entities: Any items, technology, or software subject to the U.S. Export Administration Regulations (EAR) require a BIS license for export, re-export, or in-country transfer to them, with applications presumed denied.
A common misconception to clarify: Arrow is not TI’s “sole distributor.” TI maintains a global network of authorized distributors, including Mouser, Digi-Key, Avnet, and others. Arrow is just one player, particularly active in China. Arrow’s parent company has responded by stating it will investigate and cooperate with the U.S. government, emphasizing no impact on overall operations [Source: Arrow official statement]. While the event is fresh, it echoes investigations from 2020, suggesting it’s unlikely to collapse Arrow entirely.
2、Multi-Dimensional Impacts: Short-Term Disruptions and Long-Term Warnings
- On Arrow: The China/Hong Kong subsidiaries can no longer directly obtain TI or other EAR-controlled components from the U.S., leading to delays or cancellations in order fulfillment. Arrow may isolate these entities, shifting business to other regions, but compliance costs will rise, with short-term stock fluctuations (ARW has already seen dips).
- On TI: Direct impact is minimal (TI is not sanctioned), but it could lose some market share in China. TI components (e.g., MCUs, power ICs) may face short-term shortages, with prices potentially rising 5-15%.
- On Clients: Small and medium enterprises relying on Arrow will suffer the most—delays, price hikes, and inventory shortages. Banks may scrutinize related transactions, potentially freezing payments.
- On the Industry: This amplifies U.S.-China trade tensions and “decoupling” trends. Chinese distributors may accelerate shifts to domestic/European alternatives, while gray-market risks increase (BIS can trace violations, with fines up to $300,000 per instance).
- On Us (EMS Manufacturers): Component uncertainty can ripple into PCBA production, but it’s also an opportunity—we help clients optimize BOMs and provide TI alternatives to minimize delays.
Overall, this isn’t a “supply cutoff crisis” but a compliance reminder: Supply chain diversification is essential.
3、How Will TI Respond? Predictions and Observations
Based on TI’s past handling of sanctions on entities like Huawei and ZTE, TI will prioritize BIS compliance while mitigating client impacts:
- Suspend shipments to the Arrow subsidiaries and redirect to other authorized channels (e.g., Mouser/Avnet).
- Boost direct sales via TI.com, prioritizing inventory for large clients.
- Enhance compliance: Require distributors to sign end-to-end traceability agreements to prevent components from flowing to restricted parties.
- Long-Term: Further localize China’s supply chain to avoid similar risks.
We anticipate TI will release client guidance (e.g., FAQs) within 1-3 months—monitor the TI website closely.
4、What Should Clients Do? A Practical Guide
Don’t panic—the path to switching is clear. Here’s Tortai Technologies’ advice based on real-world experience:
（1）Short-Term Mitigation: Inventory your stock and contact Arrow’s global (non-sanctioned) entities to reroute orders. Supplement from spot markets, but verify authenticity.
（2）Switch Distributors:
- Mouser/Digi-Key: Rich online inventory for small batches.
- Avnet/Future Electronics: Strong for large-scale customization.
- TI.com: Direct purchasing, requiring an End-User Statement.
（3）Design Alternatives: Evaluate pin-to-pin replacements (e.g., TI’s LM317 regulator swapped for ST’s L78; TI’s MSP430 MCU for NXP’s LPC series). Tortai Technologies can audit your BOM for free and provide compatible lists.
（4）Compliance Self-Check: Sign end-use statements ensuring no involvement with Iran or other restricted parties. Avoid gray channels—the risks are too high.
（5）Mid-to-Long Term: Build multi-vendor systems; large-volume clients can secure long-term contracts with TI.
Case in Point: We recently assisted a client in replacing TI power ICs with Infineon alternatives, reducing delays to 2 weeks and costs by just 3%.
5、Tortai Technologies’ Perspective: Compliance as the Baseline, Resilience as the Edge
As an EMS provider, we advise against risking sanctions circumvention—it can cascade through the entire supply chain. Instead, this event underscores: Distributor reliance isn’t “exclusive,” and design redundancy with local alternatives is more reliable. Tortai Technologies offers comprehensive supply chain auditing services, including KYC reviews, BOM optimization, and emergency stocking. We reject “quick-fix mentalities” and emphasize full-chain compliance (e.g., RoHS/REACH/UN38.3) to keep your production stable amid uncertainties.
Conclusion: Opportunities Behind the Hotspot
The Arrow event serves as a wake-up call but also drives healthier industry practices. Tortai Technologies is committed to being your reliable partner—from component alternatives to PCBA delivery, solving supply chain pain points one step at a time.
Disclaimer: This article is based on public information and does not constitute legal or investment advice. Consult professional advisors for specifics.