Showing posts tagged 'electronic components'
06 October 2021
Rare earth metal prices explode
Prices for rare earth metals have exploded over the last 12 months, moving nearly 50% higher on average since March.
This development could push prices of electronics components higher than ever, as a perfect storm of expensive raw materials + limited production capacity + higher demand = rocketing prices.
As we are seeing with the global semiconductor shortage, fluctuations in supply chains ripple through the electronics industry.
Electronic component shortages have, in part, been caused by reduced mining quota for raw materials including rate earth metals. But the problem now isn’t a lack of mining, but the soaring demand for rare earth metals.
The high price reflects strong demand. Rare earth metals are used in most electronic components and devices, from integrated circuits to displays, vibration motors and storage, so it’s easy to see why demand is so strong.
For example, materials like neodymium and praseodymium used to make magnets have seen a 73% increase in demand in 2021. Holmium oxide used in sensors, terbium oxide used in displays and cobalt used in batteries have also seen increases.
Why have prices exploded?
China is the only country in the world with a complete supply chain for rare earth metals from mining, to refining, to processing. With over 55% of global production and 85% refining output, the world depends on them for rare earth metals.
In January, Beijing hinted at tightening controls for earth metal exports, triggering panic across the world and sending prices soaring.
For those of you who remember, rare earth prices exploded in 2011 when China’s export volumes collapsed. China cut export quotas of the 17 rare earth metals and raised tariffs on exports, sending prices soaring by more than 50%.
Talk about déjà vu!
Another factor for the price explosion is supply and demand. Even with China’s hints, demand for rare earth metals is outstripping supply. The world is using more electronics than at any time in its history, and rare earth metals are needed to make more of them.
It isn’t only relatively unknown materials like neodymium and praseodymium that are surging in price, but also more commonly known materials like tin, aluminium and copper, which have also surged in price in 2021.
So, in a nutshell, demand for rare earth metals is outstripping supply, and China (which has significant control over rare earth metals) has hinted at tightening exports, sending a shockwave through the supply chain.
The issue is bad and will take time to resolve. The United States is the second biggest producer of rare earth metals, and in February, President Joe Biden announced a review into domestic supply chains for rare earths, medical devices, chips and other resources, with a $30 million initiative to secure new supply chains.
Unfortunately for the world, China’s control of 55% of global production and 85% of refining output for rare earth metals means they control the market. Missteps, problems at home, and hints about tightening controls have already sent rare earth metal prices soaring, and it stands to reason they will continue creeping higher in the near-term.
01 September 2021
Component Prices Rise 10% to 40% - But why?
While component price rises are expected when demand outstrips supply, the scale of recent increases has come as a shock to many businesses.
In its Q3 Commodity Intelligence Quarterly, CMarket intelligence platform Supplyframe reports that some electronic components have seen prices rise by as much as 40%, making it uneconomical for products to be made.
In particular, semiconductors, memory, and modems are seeing 10 to 40% price increases, exceeding what most analysts envisioned for 2021.
Why are prices rising?
Price rises start with materials. There are long lead times for many raw materials, causing shortages. Add rising commodity prices and difficulties transporting products and you have a disrupted manufacturing economy.
You also have to factor in the impact of the coronavirus pandemic, which has caused labour shortages and disrupted the manufacturing economy with shutdowns.
Logistics is also a big fly in the ointment for electronic components. The industry is recovering from COVID-induced shutdowns and travel restrictions are causing problems at borders, creating delays that ripple through the supply chain.
Supply and demand
The bulletproof economics of supply and demand also rule the roost for electronic components, and demand is higher than it has ever been.
We are in a situation today where most electronic components manufacturers are running at 99-100% capacity and can’t keep up with demand.
Demand is outstripping supply for chips, memory and communications components like integrated circuits, discrete circuits, optoelectronics and sensors, creating a bidding war as manufacturers scramble to get what they need.
Growing demand for new technologies
Emerging technologies like artificial intelligence, machine learning, virtual reality, augmented reality and edge computing are fuelling demand for smarter chips and data centre modernisation, while technologies like 5G and Wi-Fi 6 are demanding infrastructure rollout, which requires significant investment.
Across the board, technology is booming. Manufacturers are making more products for more people, and they must do so while balancing costs at a time when component prices are rising - no easy feat even for established businesses.
Everyone is raising prices in line with their own cost increases, from semiconductor manufacturers to outsourced fabs and suppliers. At 10 to 40%, these increases are putting pressure on supply chains and businesses.
How many price increases will target markets absorb? How can we sustain production without significant margin pressure? These are the challenges facing manufacturers, who are stuck between a rock and a hard place right now.
There are a few solutions:
- Equivalents: Source equivalent components from different brands/makers/OEMs that meet size, power, specification, and design standards.
- Use an electronic components distributor: Distributors are the best-connected players in the industry, able to source hard-to-procure and shortage components thanks to relationships with critical decision-makers.
Prices will fizzle down, eventually
Although research published by Supplyframe says pricing challenges will remain through early 2023, they won’t last forever. Price rises should fizzle out towards the end of 2021 as manufacturers catch up to orders and reduce disruption.
If you are experiencing an electronic component shortage, we can help. Email us if you have any questions or call us on 01904 415 415 for a chat with our team.
25 August 2021
Automotive electronics market set to grow
With vehicles getting smarter, more connected and more autonomous, the automotive electronics market looks set to soar.
Future growth in numbers
Back in March, Precedence Research predicted the automotive electronics market would hit around US$ 640.56 billion by 2030.
Then, in July, Global Market Insights released research predicting the automotive electronics market would hit around US$ 380 billion by 2027.
Interestingly, measured across the same period, both research reports (which are independent) predict a similar growth pattern. Global Market Insights predicts a 6% CAGR, while Precedence Research predicts a CAGR of 7.64% over a 3-year longer period.
With two separate reports indicating significant annual growth, the automotive electronics market looks set to boom. But wait, there’s more.
A 9.3% CAGR is expected in the automotive electronics market by 2030, according to research by P&S Intelligence. They predict slightly less growth than Precedence Research to 2030, at US$ 615.3 billion (versus $640.56 billion).
There are approximately 1,400 chips in a typical vehicle today, which each chip housing thousands of components on a semiconductor wafer, creating the integrated circuits that power computing, memory and a host of other tasks.
Those are just the chips.
Cars have thousands of other electronic components, including passive, active and interconnecting electronic components, from batteries, sensors and motors, to displays and cameras. Oh, and everything is connected.
All told, a typical car today has more than 50,000 electronic components that enable features like in-car Wi-Fi, self-parking technology, adaptive headlights, semi-autonomous driving technology, keyless entry and powered tailgates.
However, cars are getter smarter and more advanced. Electronic components today make up around a third the cost of a car, which will increase over time as more sophisticated and greater numbers of components are used.
Smarter cars need more components
The future of cars involves electrification, autonomous and self-driving technologies, hyperconnectivity, Internet of Things, augmented reality, artificial intelligence, biometrics and a whole host of next-generation technologies.
How will these be enabled? With electronic components.
Let’s take electrification as an example. An electric car handbook will tell you an electric car has a motor, a battery, an on-board charger, and an Electronic Control Unit (ECU) that controls one or more of the electrical systems or subsystems in the vehicle. Together, these let you drive around, charge, and pop to the shops.
In-between these systems, are hundreds of thousands of electronic components that make them work. You see, an Electronic Control Unit is a single component, containing thousands of smaller components, each performing a critical role.
The automotive electronics market is set to soar because cars and other vehicles will need more components with electrification and next-gen technologies. Sometimes, things can be simple to explain, and this is one of those times.
The electronics industry is facing a global chip and electronic component shortage which is expected to last 2-3 years. As demand for automotive electronics soars, shortages look very likely for certain components like CPUs and memory.
The solution for many companies will be to use an electronics component distributor, to fill gaps in the supply chain and keep things moving.
Electronic component distributors like Cyclops can source hard-to-procure components because we have relationships with the best suppliers in the industry. Contact us today with your enquiries at email@example.com or call 01904 415 415.
10 August 2021
Passive and Interconnecting Electronic Components market to display lucrative growth
The passive and interconnecting electronic components market is predicted to display lucrative growth across all regions over 2020-2025, with North America the dominant market due to the prominence of players in the country.
These predictions come from The Passive and Interconnecting Electronic Components market report from Market Study Report, which you can request a sample of here. The report delivers a rigorous analysis of the market, examining the main growth drivers and restraints, as well as opportunities for revenue cycles.
The passive and IEC markets are forecasted to experience a CAGR (compound annual growth rate) of 3.1% from 2020-2025, with the US market expected to reach $32.3 billion by 2025, up from $28.6 billion in 2020.
Key players in the industry include:
- API Technologies
- AVX Corporation
- ST Microelectronics
- 3M Electronics
- Fujitsu Component
- American Electronic Components
- Eaton Corp.
- Datronix Holding Ltd
As the world gets smarter and demand for passive and interconnecting electronic components increases, small players will also take a bigger role. Trade barriers caused by geography will need to be overcome to meet demand, fuelling an explosion in growth across all developed markets, from Europe to Asia Pacific.
What is fuelling growth?
While the report provides in-depth analysis of factors that will fuel growth, we don’t want to tread on its toes, so we’ll provide a simpler analysis.
The reason the passive and interconnecting electronic component markets are going to experience significant growth over the next several years is because of industry tailwinds and technological advancement. Given today’s technological innovation, it’s no wonder that demand for all types of electronic component is soaring.
Disruptive new technologies, rapid advancement in existing technologies and the adoption of smarter, more connected devices, is fuelling unprecedented demand for everything from passive components to chips.
For example, in 2021, manufacturing of passive components could see an 11% increase, but demand is likely to exceed 15%.
Making supply meet demand
There has been a lot of talk about how the next great technological cycle will fuel growth for the semiconductor industry, but it’s important to recognise that chips are nothing but silicon and metal without other components like passives and IECs.
While supply for some components like display drivers is ticking along, there is a global shortage for other components like active, passive and electro-mechanical components, putting manufacturers in a compromised position.
The shortage for some IECs and passive components is expected to last several years, so making supply meet demand will be a challenge in the near future.
To make supply meet demand, suppliers and manufacturers will need to partner with well-connected distributors. Electronic component distributors are the best-connected players in the supply chain, linking sellers with buyers and vice versa.
Sourcing and allocating shortage electronic components is something that we specialise in at Cyclops. We help source components that are impossible to find, helping to keep supply chains moving and manufacturing plants going.
With the passive and interconnecting electronic components market set to soar, planning is essential to make supply meet demand and capitalise on growth.
28 July 2021
What Shortage? How Electronic Component Distributors Make Supply Meet Demand
When buyers can’t find electronic components, they turn to distributors like us who can source scarce and obsolete parts.
Our experience has been tested to new extremes over the last several months due to the semiconductor and wider electronic components shortage. This shortage was years in the making but has been amplified by COVID-19.
It says everything about the state of the electronic components supply chain when Samsung, who make their own chips, don’t have enough chips. Shortages have affected brands like Samsung, Apple, Volkswagen and Nintendo not just in terms of supply, but also prices, which have skyrocketed in 12 months.
When the chips are down, prices go up.
Distributors are busier than ever
Cyclops Electronics, as well other distributors, have become more essential than ever in supply chains since the COVID-19 pandemic began.
It’s no exaggeration to say distributors like us are keeping many businesses going. We keep production lines going by sourcing scarce parts from around the world - parts that would be impossible to source without excellent connections.
We are seeing desperation from companies that have never experienced supply chain problems. We’re talking about global companies listed publicly.
The situation is so bad for some components that some companies are paying a 100% premium just to secure them. Supply and demand is driving fierce competition and bidding wars are not uncommon.
If these revelations shock you, consider this - the electronics components shortage isn’t expected to abate until late 2021 at least. By then, there should be more order to the chaos, but some industry experts expect it to persist longer.
For example, IBM has said the chip shortage could last 2 years.
A 2 year extension would extend the chip shortage to 2023 at least. This is likely to be the case for other components too, including memory, integrated circuits and display drivers. A huge number of companies will be affected.
Playing a crucial role in the supply chain
Distributors like us are able to source hard-to-procure components because we have rapport with the best suppliers in the industry. In other words, we have immense buying power, and we put this to use for our customers.
Another way we are playing a crucial role in the electronics components supply chain is the reduction of counterfeit components.
Counterfeiters are taking advantage of weakened supply chains, lapse quality control processes and inadequate reporting to flood the market with illegal components. This has affected thousands of buyers and will affect many more.
Our role in this is to deploy anti-counterfeiting technologies including a SENTRY machine, die testing and decapsulation testing to test the components we procure. This ensures the components we supply are genuine parts.
We provide industry-leading chip testing to catch counterfeit parts. We have ISO 9001:2015 certification and ESD qualified staff.
If you need to buy parts and the only way to get them is with a distributor, don’t rush in - make sure your distributor is as equally qualified as us first. If you need help, feel free to call us on 01904 415 415 for a chat with our experts.
02 June 2021
IBM says chip shortage could last two years
As technology has advanced, semiconductors have found their way into everything that requires computing power, from coffee machines to cars. But the manufacturing output for semiconductors has not kept up with this change.
The semiconductor industry has also been hit with an industry rotation in demand that it was never prepared to deal with.
This happened at the start of the coronavirus pandemic when automotive manufacturers scaled back semiconductor orders. Lockdowns meant they weren’t making enough cars, so they scaled down and battened the hatches.
Meanwhile, the demand for data centre, computing and home device semiconductors soared. Rather than finding themselves down on orders, semiconductor makers were all of a sudden making more semiconductors than ever before.
And then the automotive sector came roaring back.
Now, the semiconductor industry is in a state of disarray. Manufacturers are struggling to make enough chips in a situation we’ve called Chipageddon. This is compounded by the fact that silicon prices are soaring, making chips more expensive.
How long will the chip shortage last? The latest opinions don’t deliver good news - IBM says the chip shortage could last 2 years.
The president of IBM, Jim Whitehurst, has said that the current chip shortage could last another two years. Here’s what he said in an interview with the BBC:
“There's just a big lag between from when a technology is developed and when [a fabrication plant] goes into construction and when chips come out. So frankly, we are looking at couple of years… before we get enough incremental capacity online to alleviate all aspects of the chip shortage."
What Whitehurst means is it takes a long time to set up a chip fab before it can start producing chips. It takes 12-24 months typically, so you have a situation where even if a lot of fabs are being built, they won’t contribute for years.
The chip shortage is so severe that it has led IBM to look towards other ways to meet demand. “We're going to have to look at reusing, extending the life of certain types of computing technologies,” says Whitehurst, “as well as accelerating investment in these [fabricating plants], to be able to as quickly as possible get more capacity online."
IBM isn’t alone
There is a serious imbalance in the semiconductor industry, and this is a problem many companies are having to contend with.
For example, Ford cancelled shifts at two car plants earlier this year and said profits could be hit by up to $2.5bn due to chip shortages. Meanwhile, Apple announced it would take a $3 billion to $4 billion hit due to the global chip shortage.
However, the most telling story of the semiconductor shortage comes from Samsung.
Samsung is the world’s largest manufacturer of DRAM and the world’s fourth largest semiconductor manufacturer, and even they are experiencing shortages, having to delay the launch of the next-gen Galaxy Note until as late as 2022.
The fact that Samsung is experiencing a chip shortage when it manufactures its own chips tells us everything we need to know - the chip shortage is severe. It isn’t a small shortage at all - it’s an enormous shortage affecting everyone across the supply chain.
Unfortunately, it looks like the global semiconductor shortage will be around for a few years yet, and things could get worse before they get better.
The semiconductor shortage is the result of a catalogue of problems going back several years. Here are some of the highlights:
Intel is the world’s leading supplier of CPUs for PCs and data centres and in 2018 they caused a chip shortage with the troubled development of 10nm chips. Intel’s mistakes have led to a shortage in CPUs for computers.
Declining DRAM prices
DRAM is a computer’s main memory. In 2019 and 2020, prices for DRAM declined, causing the biggest players - Micron, Samsung and SK Hynix - to curb their output. This led to supply constraints when the coronavirus pandemic hit.
The global demand for chips has hit an all-time high. Data centres, computers, cloud services, augmented reality, 5G, connected devices and connected vehicles are fuelling demand. This is great for chip sales, but the industry can’t keep up.
The U.S. created a semiconductor shortage of its own making when they levied sanctions against several Chinese companies, including SMIC and Huawei. This exasperated the chip shortage, placing strain on domestic manufacturers.
Coronavirus pandemic and cancelled orders
During the coronavirus pandemic, demand for semiconductors soared in some industries (e.g. electronics) and dropped in others (e.g. automotive). When demand came back for “down” industries, demand didn’t drop for “up” industries, leading to a shortage.
We now have a situation where carmakers are battling the electronics industry for chips. There aren’t enough chips to go around and increasing manufacturing capacity is impossible without significant investment in new foundries.
The electronics super cycle is not going to end anytime soon because there are so many tailwinds, including self-driving cars, VR, AR, AI, 5G and space travel. So, we cannot expect demand to drop and the chip industry to catch up with itself.
To meet demand, we need new foundries. These take 12-24 months to set up. Many companies are already building new foundries, or they are boosting capacity at existing plants, which is good news for the long run.
In the here and now, manufacturers can meet demand for chips by partnering with an electronics component distributor like us. We specialise in the procurement and delivery of electronic components and parts (including semiconductors) for a wide variety of industries from the world's leading manufacturers.
The semiconductor shortage has affected the entire manufacturing supply chain but our close links in the industry mean we have better access to chips than most. No promises, but we have an excellent track record across all sectors.
Get in touch with us for a chat about your needs. We’re here to help.
Call: 01904 415 415
28 April 2021
Electronics Counterfeiters Capitalize on Component Shortages
The electronics industry is experiencing a components shortage which is bad news for everyone except counterfeiters who are seeing greater demand than ever.
The total available market for counterfeit electronic components is billions of pounds, so it makes no wonder this illegal activity is seeing rapid growth.
What is a counterfeit part?
A counterfeit part is an unauthorised copy, imitation, substitute, or modification of an original component. Counterfeit components are a misrepresentation of the real thing but can be extremely convincing they are legitimate.
Giveaways that components are counterfeits include:
- Colour variances
- Misspellings and incorrect labelling
- Mismatched date codes
- Duplicate date codes and labels
- Missing items
- Poor packaging and quality control
- Font variances
- Country of origin problems
- Signs of “resurfacing”
- Failure in tests and performance issues
How are counterfeiters capitalising on component shortages?
Electronics counterfeiters are capitalising on component shortages by penetrating weakened supply chains, taking advantage of inadequate quality control processes and taking advantage of inadequate reporting.
Demand is exceeding supply for many electronic components, exasperating the issue. The semiconductor shortage is the current big one.
As lead times get pushed out, buyers are faced with a dilemma: should they stick with trusted suppliers and put up with delays or look for another supplier? The risk is the ‘other supplier’ being a counterfeiter or not having the necessary controls in place to ensure that shipments do not get intercepted and changed.
This dilemma is when counterfeiters strike to take advantage. The wrong decision can have significant financial and economic consequences.
Another area of focus for counterfeiters is the scarcity of parts caused by end-of-life designations. There is significant demand for end-of-life components, but they can be very hard to find. Counterfeiters pray on this weakness with illegitimate copies.
There’s also a grey market for used electronic components that are refurbished or reconditioned and sold as new. The danger with this is using components that are spent and not repaired properly. When you buy “new” the components should be exactly that. Buying used is never a good idea, unless you want used parts.
How can I protect myself from counterfeiters?
First of all, you should read our 8 Step Guide To Buying Electronic Components With Confidence and Avoiding Counterfeits.
Secondly, you should only work with electronic component suppliers who have a compliance program in place. A good benchmark is suppliers who are ERAI (Electronic Resellers Association International) members. We are ERAI members, so we are on the ERAI database and use ERAI supply chain risk mitigation solutions.
Secondly, it’s really important that you have adequate inspection and testing processes in place to verify the components you receive. If your supplier tests components for you, what testing facilities do they use, and which services are performed?
Electronics counterfeiters are capitalising on component shortages by taking advantage of inadequate quality control and reporting processes and weakened supply chains.
A robust supply chain and trusted parts suppliers are the two keys to protecting your organisation. If you are concerned about counterfeit components in your supply chain we’re happy to provide advice. Call us on 01904 415 415 for a chat.
10 February 2021
What does 2021 hold for the electronic components industry?
The coronavirus pandemic hit the electronic components industry like a freight train, knocking supply and demand for six. Now that 2021 is upon us, economies are starting to open up with pinned hopes on vaccines. This could be a banana skin, but 2021 should be a calmer year overall. The world should get back to business.
2021 in a nutshell
The avenues shut down for raw materials and shipments of electronic components will begin to open back up in 2021. This will create a healthier supply and demand market than 2020. Some issues will remain. Component shortages are likely, and this is especially true of newer parts that are found in connected devices.
Semiconductors will lead demand
The semiconductor industry saw a significant increase in global chip demand in 2020 and this will only continue in 2021. Cyclicity driven by 5G and Wi-Fi 6 upgrades and tailwinds like edge computing, AI and AR / VR will fuel demand.
Who will benefit most? Our money is on Broadcom, Arm, Qualcomm, Intel, AMD, Nvidia and Skyworks with TSMC winning on the foundry side.
DRAM will follow the path of semis
Dynamic random access memory (DRAM) is as essential to connected technologies as semiconductors. 2020 saw a sharp increase in recovery from the first quarter, and 2021 will exhibit a similarly healthy supply and demand situation.
Who will benefit most? Samsung, Micron and SK Hynix, who are the first, second and third largest manufacturers of DRAM respectively.
Shutdowns will continue
The risk of shutdowns of component production because of the coronavirus will remain in 2021. This will create extended lead times and supply issues. Governments may be forced to shutdown factories in localised areas.
The good news is this will become less common as the year goes on. The pandemic’s impact on production will reduce over time.
Tailwinds will fuel more demand than cyclicity
When evaluating electronic component demand, cyclicity and tailwinds are often pitched against each other. In 2021, we expect tailwinds like AI, edge computing, robotics and VR / AR to fuel greater growth than cyclical upgrades.
This is a sign of the times. The world is getting more connected and smarter. Innovation will fuel tailwinds and create booming tech sectors.
Counterfeiters will grow more prolific
One of the sad realities of electronic components is counterfeit components. They are becoming more sophisticated. As manufacturers clamber to get stock in this year, they are at a high risk of being targeted by counterfeiters.
Companies should rigorously control purchase sources, conduct quality inspections and use a trusted distribution partner to combat these risks.
Looking to the future
In 2020, the electronic components industry handled the coronavirus pandemic in an efficient and calculated manner. Supply and demand issues hit the industry, but they were solved for the most part in good time.
2021 will be calmer for several reasons: 1) We now have a lived experience of the coronavirus and know how to manage shutdowns efficiently, and 2) There is an increased need for us to get back to work and get on with our lives.
03 February 2021
How Cyclops helps tackle environmental issues in the electronics industry
There’s no industry as polarising as the electronics industry when it comes to the environment. This is the industry that generates 70% of all toxic waste on the planet, yet it’s also the industry that’s pioneering renewable energy to address climate change.
The best way to look at the electronics industry from an environmental point of view is as a work in progress. We know that the industry is facing several environmental challenges now and in the future. The question is, how should we respond to them?
We are a global electronic component distributor, supplying electronic components to global customers. Our position in the industry has given us a unique perspective of the environmental challenges it faces. In this article, we’ll discuss some of the challenges we are facing and how we are addressing them.
Improper component storage
One of the biggest problems in the electronics components industry is the lack of environmentally-controlled storage facilities.
The biggest danger to electronic components is humidity which has to be controlled to ensure the components do not degrade. Problems like moisture absorption and contact corrosion have to be considered in storage.
Cyclops only operates environmentally-controlled storage facilities. Our facilities are designed to ISO 9001 standards. ISO 9001 is the international standard that sets out the requirements for a quality management system.
Electronic components and electronic devices are shipped via land, sea and air. Some packages find their way in transit covering several countries in a single day. This generates unavoidable emissions as a natural by-product of operating.
These emissions can be reduced or offset in a few ways. The simplest way is to always use the most efficient transit methods and logistics firms that offset their emissions. This means the sender doesn’t have to offset their own emissions.
We go with this method because it allows us to meet our environmental obligations while also ensuring a high-quality delivery service.
Electronic waste (e-waste)
Electronic waste is the biggest issue facing the electronics industry. Only around 20% of e-waste is recycled each year. The rest enters landfill. It accounts for 70% of all toxic waste on the planet, which is an astonishing figure.
Cyclops is helping to reduce the amount of electronic waste that enters landfill by putting components that would otherwise enter landfill back into use.
You’d be surprised by the number of components we save that are new old stock. We save hundreds of thousands of components each year. Many of these are rare legacy electronic components that are no longer being made.
The electronics industry gave you the smartphone in your hand and the internet that connects you to this article. There’s no denying it’s an immeasurably valuable industry and our future will have more technology. That’s a certainty.
As civilisation becomes more reliant on technology, we will develop technologies that address the industry’s biggest environmental challenges. In particular, we hope to see a significant reduction in e-waste and emissions soon. For now, the future is what we make of it, and we’re optimistic about what the future holds.
13 January 2021
How to deal with electronic component obsolescence
With technologies advancing at such a rapid rate, the rate of electronic component obsolescence is as high as it has ever been. OEMs have their work cut out to keep up with an industry where demand for electronic components is under increasing pressure as a result of innovation across the entire electronics industry.
Understanding the risks of obsolescence
Component obsolescence is bound to happen in time because all components have a diminishing lifespan. All components become obsolete eventually.
However, the rate of component obsolescence is increasing over time. This means the challenges facing you are growing.
Dealing with electronic component obsolescence
Now that you know obsolescence is nailed-on given a large enough timeframe, how can you deal with the challenge when you face it? Here are some tips:
- Understand why obsolescence happens
The three main reasons for electronic component obsolescence include short product life cycles, innovation, and increased demand.
A combination of these creates the perfect storm. A great example of this storm is with semiconductors, which are advancing at a rapid rate.
Which reasons for obsolescence will affect you the most? By understanding this, you can prepare properly for the future.
- If you are designing a product, look into the longevity
The best defense against obsolescence is designing products that use components that are not expected to become obsolete during your product’s lifecycle.
You can assure longevity in a few ways:
- Review the ‘Production Status’ of the component
- Ask your supplier about component longevity
- Look at the datasheet creation date - if it’s several years old, this could be an indication that the part may be due an upgrade sometime soon
Even when a component is due to become obsolete, it could be several years before this happens. This insight will be invaluable to your business.
- Get to the bottom of the type of obsolescence
If you get a notification that a component you use is becoming obsolete, take a step back and look into the reason why this is the case.
You can do this by looking at the PCN (Product Change Notification) which will provide the technical information you need.
If the component is a passive component, then there’s a good chance you will be able to source an equivalent component. If the component is an active component, you may have to upgrade to a newer component.
- How to deal with obsolescence when it happens
You have three options when dealing with obsolete components:
- Equivalence - this is when you look for an equivalent component. You can cross-reference many components, such as semiconductors, to find exact equivalents. You should review the datasheets to ensure cross-compatibility.
- Design - this is when you work with an OEM to manufacture a component on your behalf. It carries a high cost but reduced risk because the component is unique to you. NANDs and micro-controllers are common examples.
- Use old stock - somewhere in the world, there’s probably the component you need in storage. This is available if you can find it. An electronic component distributor is your best friend in this scenario to get the components you need.
If you are struggling to source your obsolete or hard to find electronic components Cyclops Electronics is here to help.
Contact us today.
Call: 01904 415 415
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