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21 June 2017

EU to Look At The Qualcomm-NXP Deal

Last October, a press release appeared on Qualcomm’s website.

“Qualcomm Incorporated (NASDAQ: QCOM) and NXP Semiconductors N.V. (NASDAQ: NXPI) today announced a definitive agreement…under which Qualcomm will acquire NXP” it began.

However, that deal, struck after months of negotiations, has not yet formally been completed.

Earlier this week, the EU’s competition regulator announced that it will take a closer look at the $47bn takeover.

The reason for the inquiry is that concerns have been raised that the acquisition and subsequent merger of two leading semiconductor manufacturers could be bad for both consumers and innovators.

Margrethe Vestager, the EU competition commissioner, said: “As semiconductors are used in practically every electronic device, we are dependent on them.

“With this investigation, we want to ensure that consumers will continue to benefit from secure and innovative products at competitive prices.”

The EU also said, on Friday, that it had fears that the combined Qualcomm and NXP entity could exclude rival suppliers, increase royalties and therefore impose artificial price rises.

This news comes at a bad time for Qualcomm because the San Diego-based company is already fighting one antitrust battle in America with the U.S. Federal Trade Commission over the use of “anticompetitive” tactics. At the same time, Qualcomm has become embroiled with an ongoing legal case with Apple.

A secondary area of focus of the EU Commission is believed to be on the potential for merging Qualcomm’s wireless processors with NXP’s Near Field Communication (NFC) chips, which together are used in mobile payment systems.

Responding to the opening of the investigation, a spokesperson for Qualcomm said that “it is confident that it can address the [EU’s] concerns.”

“The acquisition is complementary, and driven by the belief that the combined efforts of the two companies with produce even greater innovation than they would alone,” Qualcomm added.

Qualcomm believes that the process will be completed by the end of the year, allowing them to formally complete and close their acquisition of the Dutch-based NXP.

The European watchdog aims to make an official decision by October, though, of course, this could get delayed. The American counterpart to the EU’s competition regulator, the Federal Trade Commission, okayed the deal back in April.


13 June 2017

Electronic Component Lead Time News (June 2017)

There has been a lot of market fluctuation since our last update, with lead times expanding and contracting across the board. Certain Vishay products now come with a potential lead time of thirty-nine weeks, whilst, in comparison, the wait for certain Fujitsu components has decreased by around month.

The biggest news comes out of the DSP & Microprocessor sector, where availability has continued to contract. There have been murmurings that supply constraints, partly imposed by the big manufacturers, could lead to a period of widespread allocation in this area.

In short

  • Lead times for microcontrollers continue to rise.
  • Availability of Fairchild, Nexperia and ON Semi logic product groups are partially constrained.
  • Micron (DDR3) and Toshiba (all NAND flash) memory remain on allocation.
  • Analysts predict an increase in lead times for ON Semi and ST-manufactured analog parts.

Analog

The market for Analog products has remained stable, with minimal change in lead time, availability or pricing from the sector’s major manufacturers. Fears remain about delivery constraints for ST Micro’s TSSOP16 product groups in the coming weeks and months.

As a result, industry sources are predicting that a lead time increase from ST Micro (and ON Semiconductor) will follow.

Discretes

In May, we reported that ongoing capacity concerns had helped drive lead times for discrete product groups upwards. Unfortunately, it is a similar story this month as many manufacturers have confirmed lead time increases in the last couple of weeks.

Nexperia, NXP and ST Micro have all extended their lead times, to a maximum of twenty-four, eighteen weeks and twenty-six weeks respectively, whilst ON Semiconductor’s ongoing problems with capacity has seen the availability of its rectifiers and power MOSFETs diminish.

However, the biggest news comes from Vishay. The Pennsylvania-based manufacturer is now showing lead times of up to thirty-nine weeks for some of its product families. To add context, last month, franchise outlets were telling customers that these lines would come with a (maximum) wait of thirty weeks.

Given that lead times have been increasing, we would suggest checking with independent distributors to secure stock, should you need it for an urgent production cycle.

Memory

Bidders are still circling Toshiba’s profitable chip business, but with any buyout still a long way from becoming a reality, the Japanese firm’s memory products remain on allocation – and will do for the foreseeable future.

Micron’s DDR3 lines remain on allocation, though some DDR2 lines are now partially available, and its good news for users of Fujitsu’s memory products as lead times for its product families has decreased this month.

That being said. there remains a worldwide shortage of DRAM memory products - an issue that appears to be affecting a wide range of OEMs.

Optical

Lead times for opto product groups have remained constant since our last update in May, though there has been an increase in the number of Osram lines that are available on an allocation-only basis.

Around twenty lines have been added since our last update, though a number of these are believed to have been included as a temporary measure due to high demand from SSL and automotive sectors.

DSP & Microcontrollers

We have seen that lead times in this area have risen in the past month, continued a trend that has been present in the DSP and microcontroller area for most of this year. Only Microchip and Texas Instruments have managed to keep lead times stable, though certain product groups from these manufacturers are only available after a twenty-six week wait.

Our information hints that this sector is very close to suffering from severe supply constraints across the board. If demand remains high – as it has done for the past few months – then a period of allocation looks to be on the cards.

Logic

The logic market has remained stable, though there has been a slight lead time increase from Fairchild and Nexperia.


17 May 2017

Electronic Component Lead Time News (May 2017)

Lead times have generally remained stable throughout April and into May, though there has been fluctuation within individual product categories – noticeably DSP and microprocessors.

However, the biggest news in relation to the availability of electronic components comes from the ultra-competitive memory sector. Over the past six months, the cost of memory has risen as supply has become constrained. And to make matters worse, all of Toshiba’s memory products are now available only through allocation, as are some lines of Micron DDR3 memory. 

In short

  • Micron and Toshiba products on allocation
  • Memory prices stabilise but still remain high
  • Lead times for microcontrollers rise across the board
  • ON Semiconductor and ST lead time rise

Analog

The availability, price and lead times for the majority of analog product have remained stable through April.

Besides a couple of delivery constraints being reported for ST families (that have resulted in a slight lead time increase), the major worry in this sector is the availability of ON Semiconductor products.

According to our latest information, lead times for analog components have increased across the board, to a maximum of 26 weeks.

Discretes

Although pricing in this sector hasn’t seen much change, lingering concerns about manufacturing could see costs rise in the near future.

Due to capacity constraints, the lead times for a handful of products have gone up in the past month, with ST lines being most affected by these ongoing problems.

We have also heard that the Nexperia’s LFPAK is on allocation.

Memory

Toshiba’s woes have made headlines across the globe and with the company’s future in doubt, the market has responded accordingly.

All Toshiba’s memory products are now only available on allocation, accompanied with a minimum lead time of three months. Micron has also placed its popular DDR3 and DDR2 lines on allocation, whilst the manufacturer’s NAND flash products now come with a 16 week lead time.

Optical

Although lead times have, generally, remained constant, there is a lot of variation in the availability of parts. For example, lead times for Samsung products come with a 6-8 week lead time whilst comparable Broadcom parts are available after a 10-14 week wait.

The biggest shift in the opto market comes with Osram manufactured parts. Lead times have risen to a maximum of 20 weeks, whilst many product families have been placed on allocation.

DSP & Microcontrollers

We have seen lead times rise across the board, with only Texas Instruments able to keep their availability at a stable level.

This increase continues a recent trend that has seen lead times gradually get longer throughout this calendar year. Lead times of 20+ weeks are becoming common.

Logic

The market for logic products has remained stable, with only minor fluctuations in price and availability.

Unexpected lead time increases can play havoc with your purchasing strategies and production runs. Make sure that you’re guarded against fluctuations in price and availability by working with Cyclops Electronics.


15 May 2017

A Return to Allocation?

With lead times expanding and major OEMs struggling to secure stock, industry sources are suggesting that the electronics industry is about to see a widespread return of allocation. Cyclops Electronics examines the issue.

Is Apple going to release a brand-new smartphone for its tenth anniversary later this year? That is what many industry analysts are debating at the moment. Although there has been plenty of column inches dedicated to the topic of Apple’s latest phone, it is probably safe to say that nobody - except Tim Cook and a couple of other high-ranking officials (perhaps) – would be able to provide a definitive answer.

However, despite there being no concrete evidence, either way, many within the media have been speculating that any imminent product launch from Apple could be delayed due to a global shortage of electronic components. If Apple is struggling, how are other OEMs going to secure the parts that they need for production runs?

And then there is talk that leading semiconductor manufacturers could be allocating stock on a widespread basis in the coming months and then add the usual fears associated with consolidation. It all comes together to paint a potentially worrying picture.

What do we know?

Well, for a start, lead times for certain types of components have risen.

During the past couple of months, the availability of ceramic capacitors through certain distribution channels has increased from sixteen to thirty weeks. The reason for this is that there has been a spike in demand from Asian manufacturers that has left little stock on the global markets.

People searching for memory from franchised sources are finding it harder and harder to secure stock. Due to strong growth in the smartphone sector and the release of a new line of premium Samsung handsets, many memory manufacturers have put their products on allocation. According to our latest information, all Toshiba memory products are now on allocation, as are Micron’s popular DDR3 lines.

Finally, we have heard reports that lead times for many ON Semiconductor and Analog Devices lines are increasing, to the point where allocation is a real possibility.

Why is this happening?

To put it simply: In many cases, supply is outstripping demand.

In a report released at the beginning of this month, an analyst for Deutsche Bank wrote: “Several supply chain reports have suggested that key component shortages…could delay the release of a high-end iPhone 8 device this [autumn].” This report supports a previous claim by KGI Securities analyst Ming-Chi Kuo who reported that the new device will face “severe supply shortages”. Bloomberg has also published a story earlier this year predicting that “supply constraints” will delay any release.

Of course, many component and semiconductor manufacturers will be prioritising their tier 1 OEMs. But even with global technological juggernauts such as Apple finding it hard to procure the quantities of stock needed, there is a massive knock-on effect across the entire supply chain.

Apple’s supposed woes, whilst making a lot of headlines in recent months, are part of a wider trend.

There has been a noticeable shortage of NAND flash products for over six months now. Worldwide production capabilities of NAND flash is somewhat limited, due to many manufacturers (a list that includes Samsung, Micron and Toshiba) switching from 2D to 3D NAND. This sluggish transition has inadvertently led manufacturers to concentrate their efforts on supplying their most prominent and profitable customers and market sectors.

For the majority of OEMs, this has resulted in an increase in price.

According to the industry research firm IC Insights, the average selling price of NAND flash is 40% higher today than it was at this point last year.

It is a similar story when it comes to DRAM memory products, which cost around 45% more than they did twelve months ago.

This inability to meet OEM demand is not just consigned to those manufacturers who produce NAND flash and other forms of memory.

Many semiconductor manufacturers plan their production runs on historical trends and future projections, building a percentage in to cope with fluctuations. However, there is a trend for customers to place high-volume orders through different sources when market prices start to rise in a bid to get the best deal. This impacts production plans, forcing lead times up and increasing the threat of allocated shipments and back orders.

Finally, the raft of mergers and acquisitions has played havoc with market trends. Consolidation is rarely positive for the OEM purchaser as the possibility of obsolescence increases whilst the number of potential suppliers diminishes.

As Adam Fletcher, chair of the Electronic Component Supply Network wrote on the issue recently: “legitimate concerns about the medium and long-term product availability, pricing, possible product rationalisation etc., causes considerable anxiety”.

In high-profile markets and industry sectors, it is natural for companies to move quickly and secure stock early to protect themselves against any change in production patterns. However, this leaves those who don’t act immediately wrong-footed and battling with inflated costs, amongst other headaches.

Another consequence of consolidation is that similar product lines are merged. This can cause a bottleneck in supply chains as demand is spread across a small number of franchised sources. A result of this is that semiconductor manufacturers can implement allocations until production levels can be increased and buffer stock successfully built up.

Whilst we are not at the point of widespread allocation due, we have seen that lead times for ON Semiconductor/Fairchild and NXP/Freescale lines have followed an upward trend throughout this calendar year.

How can Cyclops Electronics secure your supply chain?

With the prospect of allocation likely, although not officially confirmed, many OEMs will be looking at contingency plans to secure the parts that they need for upcoming production runs.

Thanks to our global procurement network, we are able to lock down large quantities of available stock – no matter where those components are located.

We offer a dedicated stockholding service for all our customers who opt to schedule their orders and deliveries. Based on your forecasts, our purchasing team will locate and buy the stock you’ll need on an annual basis. This not only secures your supply chain but because we buy the entire quantity, we can also offer you cost savings and other efficiencies that will greatly improve the bottom line of your business.

Then, when you need the stock, we ship it out to you. No more worrying about lead times and fluctuations in price: We give you the stock you need, when you need it at a fixed price. It’s that simple.

With many of the world’s largest OEMs operating on a near year-round production cycle, it can be difficult to be reactive when problems arise. If, for example, you need a small quantity to complete an additional manufacturing run, then your one-off request through franchised channels could see you left with a lead time of three months or above.

Again, this is where we come into our own. By pouring through our list of trusted suppliers from around the world, we can find you the parts you need – no matter if they’re on a three, thirteen or thirty-week lead time.

Don’t play the waiting game. Come to Cyclops Electronics and see how one of the world’s leading independent stocking distributors can keep your production lines running in a cost-effective manner, even with the threat of allocation and inflated prices looming large.


05 May 2017

Samsung could pass Intel in Chip Sales

Due to an increase in the price of memory chips, Samsung looks set to overtake Intel and become the world’s biggest supplier of semiconductors.

If industry predictions are correct, Samsung would be the first company to successfully supplant Intel as the world’s biggest semiconductor vendor for twenty-four years.

This feat is all the more impressive given that in Q1 2016, Intel’s sales were 40 percent up on those of Samsung.

Samsung’s big swing in sales is mainly down to the substantial rise of Dynamic Random Access Memory (DRAM) and NAND flash products in recent months. According to the industry research firm IC Insights, the average selling price of DRAM is 45 percent higher today than it was at this time last year, whilst the cost of NAND flash has gone up by 40 percent over the same period.

This rise is due, in part, to an industry-wide shortage of memory products, which as well as forcing prices upwards, has seen lead times increase.

If the cost of memory remains stable – or indeed rises – throughout the rest of the year, then Samsung will likely ride and this wave and overtake Intel. Some estimates put the South Korean firm’s yearly sales figures in the semiconductor sector to top $60 billion.

Intel has been the world’s biggest semiconductor supplier (in terms of revenue) since 1993 when the American company introduced its revolutionary x486 and Pentium-series processors.

This news comes at the same time as the Semiconductor Industry Association announced that IC sales for March 2017 were nearly twenty percent higher than in March 2016.

“Global semiconductor sales saw solid sales growth in March, increasing sharply compared to last year and more modestly compared to last month,” John Neuffer said.

The SEMI CEO continued: “Global sales are up 18% compared to last year, the largest increase since October 2010, with all major regional markets posting double-digit year-to-year growth. All major semiconductor product categories also experienced year-to-year growth, with memory products continuing to lead the way.”


21 April 2017

Who Wants Toshiba Memory?

With the Toshiba conglomerate struggling financially due to the losses incurred by its nuclear division in the United States, the Japanese firm’s management has made the decision to sell off its successful chip manufacturing arm (Toshiba Memory) in a bid to secure the company’s future.

The frontrunners in the race to purchase Toshiba Memory are Apple, the global electronics giant, SK Hynix, the world’s second-largest manufacturer of DRAM memory products, and Hon Hai Precision Industry, better known as Foxconn. However, various news outlets, including the New York Times, have reported that the Japanese government will attempt to block bids from companies based outside of Japan, due to fears that key intellectual properties, job and manufacturing facilities will be moved out of the country.

This stance, whilst understandable, is problematic for many of Toshiba Memory’s suitors – which is why they are exploring numerous avenues to secure a favourable position in the bidding war.

Earlier this week The Japan Times published an article saying that Apple is in the midst of exploring a variety of options that will, hopefully, secure them Toshiba’s memory-making business. The report states Apple has thought about launching a joint bid with Foxconn, but, interestingly, that the iPhone manufacturer has started to sound out Japanese investors. A source, who wished to remain anonymous, told the media outlet that SoftBank could be one of the potential investors.

It is believed that a partnership between Apple and SoftBank would be favourably received by both the Japanese and American governments. Though this is all completely hypothetical at this moment in time.

Another favourite to secure Toshiba Memory is Foxconn.

Early reports indicated that the Taiwanese-based electronic manufacturer was willing to overpay in order to force Toshiba to the negotiating table. Although Toshiba Memory has been valued in the region of $18 billion, Foxconn’s hierarchy was ready to pay $27 billion.

However, recent news stories indicate that Foxconn may be preparing a proxy bid through one of their Japanese subsidiaries, Sharp.

By proposing a deal with Sharp, Foxconn may be able to avoid any attempts by the Japanese government to block the deal, as, in theory, Toshiba Memory would remain under Japanese ownership.

“We’re not going to make profits by keeping our cash in banks,” a Sharp executive told the Asian press earlier this week, hinting at an impending move.

Whilst Foxconn, Apple and Sharp have been relatively coy about their formal intentions, SK Hynix has made some rather public overtones about a potential bid in recent days.

Earlier today (21st April), the Nikkei Asian Review published a news report stating that key representatives of the Korean memory manufacturer will be travelling to Tokyo to discuss a deal.

Chey Tae-won, the chairman of SK Hynix’s parent company, SK Holdings, is set to visit Japan early next week. In an effort to appease concerns about a foreign firm taking control of Toshiba Memory, it is believed that he will unveil plans that include further investment at Toshiba’s Yokkaichi fabrication factory and a commitment to keep jobs in Japan.


11 April 2017

Toshiba posts $4.8 billion loss, looking to sell its semiconductor business

When Westinghouse, Toshiba’s United States-based nuclear unit, filed for bankruptcy late last month, it set off a chain reaction of events that have plunged Toshiba’s very existence into doubt.

Now, less than a fortnight on, Toshiba Corporation has taken the unprecedented step of publishing its delayed financial results without prior approval from the firm’s external auditors.

Back in February, the company had forecast a $3.5 billion loss for the fiscal year. However, the recently released results indicate that Toshiba has in fact posted a loss of $4.8 billion for the period of April-December 2016.

Although the majority of Toshiba’s financial losses stem from issues relating to Westinghouse, the impact has been felt across the entire conglomerate.

In a bid to stay afloat, the company is attempting to sell off some of the most viable parts of its vast portfolio.

The Tokyo-based conglomerate has over 600 different businesses, with interests in everything from light bulbs to elevators, but its most viable – and financially attractive – asset is its semiconductor business, which makes flash-memory chips for use in mobile phones, tablets and other similar devices.

It is believed that Toshiba has valued its semiconductor business at $18 billion but Foxconn, formally known as Hon Hai Precision Industry, has indicated that it may be willing to shell out $27 billion in order to force the Japanese firm to the negotiating table.

Based in Taiwan, Foxconn is the world’s largest contract electronics manufacturer and has a roster of high-profile customers that include Apple, Sony and Microsoft. Despite the potentially high-value bid, Foxconn’s move will face stiff resistance from the Japanese government due to fears that the company will move both manufacturing and crucial intellectual property out of the country.

Another leading name believed to be interesting in acquiring Toshiba’s semiconductor business is SK Hynix. An unnamed source, quoted by Bloomberg, has said that officials at the South Korean firm are looking into the feasibility of launching a joint bid with a Japanese-based investment group to secure preferential treatment. However, there are anti-trust fears over this bid, as well as the worry that Hynix may be able to buy its partners out to gain full control in the future.

Whilst the future of Toshiba’s semiconductor arm is in the air, the 142-year-old conglomerate has sought additional financial support from financial centres, even offering real estate as collateral.


28 March 2017

ARM's new chip architecture promises a big boost for Artificial Intelligence

From Siri to Netflix and Alexa to Spotify, we all use various forms of Artificial Intelligence on a daily basis. However, the current generation of chips and processors used to power AI are operating at near capacity. That’s why the big chip designers and manufacturers are releasing new architecture to accommodate tomorrow’s technology.

At the moment, a large proportion of AI processing takes place in the cloud, partly because the chips in mainstream production today are unable to handle the sheer amount of data and power required to process the algorithms and data streams. This information that gets handled remotely is then transferred via the internet.

In a perfect world, this isn’t a problem. However, in reality, we have to contend with dodgy WiFi networks and cellular connections that drop off a cliff whenever you pass through a bridge. This poses a problem for the technologies of the future as a strong, secure and continuous connection to the cloud cannot always be guaranteed.

Self-driving cars, for example, will need processing to be conducted at a local level as any interruption could bring about catastrophic consequences.

To meet the needs of these demands, chip designers have gone back to the drawing board.

ARM, the company that designs the chips used in most major smartphones, is looking to address this by launching a major update. Entitled DynamIQ, this upgrade will boost performance in the field of AI by 50 times when compared to its current chips.

Previously, ARM has opted to focus its attention on creating chips that are extremely power efficient. This approach has helped the company succeed in locking down the smartphone and mobile devices market, an area where its competitors failed to produce as effective components. But given the adoption of AI-features by smartphone manufacturers, and the way that technology is heading, ARM has opted to evolve.

Believed to be released next year, ARM’s new central processing units (CPU) will feature multiple processing cores clustered together, up to a maximum of eight. This is an increase from the maximum of four that can be used at the moment and, in some instances, there will also be the inclusion – in some instances – of a processor for handling AI-related algorithms.

Every new ARM chip design - dubbed the Cortex-A series - will be based on this new architecture.

ARM is not the only chipmaker to release a major update to its existing architecture.

Intel has committed to delivering gains of 15% or more with every new generation, and AMD has announced its Ryzen series of chips delivers a 40% performance gain in certain metrics.

Along with AI, the Internet of Things and self-driving vehicles, other areas such as virtual reality and super-charged gaming devices are also forcing firms to research and release high-performance chips.


10 March 2017

The Key to Flexible Electronics? A Soup Ingredient...

The problem with conventional electronic components is that they tend to separate and shatter when subjected to pressure or bent out of their rigid shape. That means that for smart clothing, skin-worn devices and gadgets that need to be flexible, creating the necessary circuits and boards can be a little problematic.

However, scientists from Stanford University’s Bao Lab have created an electrode with “uncompromised electrical performance and high stretchability.” In layman’s terms, they have manufactured an electrode that won’t snap in two easily and could, one day, be embedded in heart sensors, LEDs and other technologies.

And the key substance is, of all things, an industrial soup thickener.

The team, led by Zhenan Bao, the laboratory director, started off by creating a conductive plastic.  That worked, but only to a degree as it wasn’t flexible at all. In a bid to overcome their difficulties, Bao and her fellow researchers enlisted the help of the SLAC National Accelerator Laboratory and its specialist X-ray equipment.

By having access to the state-of-the-art X-ray equipment, the team were able to pinpoint the right additive needed to create the perfect formula for stretchy electronics. And, as luck would have it, that turned out to be a molecule similar to those used to thicken soups in industrial-scale kitchens.

The substance completely stops the crystallisation process, resulting in a stretchy material that’s suitable for use in electronic circuits.

“We thought that if we add insulating material, we would get really poor conductivity,” said Bao.

However, thanks to their experience working with flexible polymers, the team managed to craft a thin, translucent and conductive material that works when stretched.

By using an inkjet printer, the research group has already managed to create a number of electrodes and stretchable transistor arrays.

It is hope that this work will help yield the ‘next generation’ of wearable technology, specifically in the field of wearable and epidermal electronics and bioelectronics.

However, it is possible you’ll view that serving of canteen soup in a different way from now on.


06 February 2017

Avoid the perils of obsolescence and excess inventories with Cyclops

Last year, a study conducted for the Germany Environment Agency founded that consumer behaviour was becoming increasingly responsible for the obsolescence of certain electronic products. Using televisions as an example, the paper pointed out that 60% of purchases were made because of a desire to upgrade, rather than a need to replace.

A similar report, undertaken earlier this year, found similar results and surmised that far too many appliances were being replaced despite being in good working order.

This buying behaviour is becoming increasingly prevalent in certain areas, with the smartphone and tablet sector perhaps the best example of how users are continuously on the lookout to purchase newer models.

A result of this behaviour is that production lines now have a small lifespan and a potentially volatile operating window, something that without pro-active management, can causes manufacturers all types of problems. What is in demand and relevant today might be superseded by a competitor tomorrow and suddenly, purchasing models become redundant overnight. The result is that devices and components, whilst still operational, can quickly become obsolete.

However, obsolescence is not just a by-product of consumer demand and OEM innovation: it is also a natural consequence of the rapid developments that we witness in the electronics industry. Thanks to advancements in science and technology, component manufacturers release new parts on a seemingly daily basis.

Although these breakthroughs must be applauded, this can be problematic for OEMs as the parts that they have incorporated into their products get phased out. The consequence of this life cycle is that demand outstrips supply.

Be on the front foot

It is important to tackle these problems head on. Many companies are working hard at protecting their supply chain against obsolescence, be it through the implementation of sophisticated algorithms or by adopting a just-in-time production strategy.

However, for all the strengths of these methodologies, they aren’t bulletproof.

Obsolescence is a problem that effects businesses of all shapes and sizes: Some of it is planned, some of it happens naturally, and some of it occurs when we least expect it. At times, it can be nothing more than a mild headache that causes a mild inconvenience; at others, it is a financially crippling issue that can affect the long-term financial viability of a company.

So, given that obsolescence can occur at both ends of the supply chain, how can you guard against this seemingly unavoidable issue?

Purchase with confidence

If you find that a component within your production schematics has become obsolete, then there are several avenues for you to explore.

The first is to redesign your product entirely. This would remove the reliance on a hard-to-find part but would bring about a substantial financial outlay.

Another option could see you source the part yourself. But given the fears surrounding counterfeit components, would this be a wise move?

A third solution (and by far the most sensible one) would be to work with an independent procurement specialist that can locate and secure stock of the obsolete part, whilst also being able to ensure its legitimacy.

Specialising in locating hard-to-find electronic components, Cyclops Electronics is one the leading independent stocking distributors in the industry. With 177,232 stocked line items, access to a further 14 million lines, and offices in eight different countries, Cyclops has an unparalleled supply network that can help shield your production lines from obsolescence and other related sourcing problems. And thanks to the company’s commitment to anti-counterfeiting and traceability, all parts sourced through the York-based firm come with a quality-assured 1 Year guarantee and are thoroughly inspected to confirm authenticity.

As well as being a leading distributor of components, Cyclops Electronics also offers manufacturers a variety of excess inventory services.

Recouping money from obsolete assets

When an entire production line becomes outdated, those leftover components often get stockpiled in a warehouse and become ever depreciating assets.

Due to the resources that excess stock consume, many companies begrudgingly opt to take a sharp financial hit to eradicate the problem. However, there is a better way to manage your obsolete inventories.

For the past twenty years, Cyclops’ excess specialists have been helping OEMs, CEMs and component manufacturers turn obsolete stock into cash. By being able to market active, passive and electromechanical parts to through the company’s internal supply network, Cyclops has built up relationships with a wide variety of businesses by protecting them against the financial dangers of obsolete stock.

Avoid Obsolescence with the help of Cyclops

At some point in time, the components that you require to manufacture your products will enter obsolescence and will become increasingly difficult to source. And at some point, when you alter your production strategies to incorporate new products or features, your stock will become heavier thanks to the presence of obsolete inventories. Although you cannot stop this from happening, you can minimise the impact that these events will have on your balance sheet.

With some careful planning and the aid of procurement and inventory experts, you should be able to save and, importantly, recoup money during the early stages of obsolescence.


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