Showing posts tagged 'integrated circuits'
22 December 2021
What is causing the surge in semiconductor and passive components?
As the world becomes smarter and more connected, the components used in electronic circuits are seeing a surge in demand.
Semiconductors and passive components (resistors, capacitors, inductors, transforms) are seeing a surge in demand as chip-heavy vehicles, consumer electronics and smart, Internet of Things devices are produced in larger quantities.
This demand is creating a shortage of semiconductors, integrated circuits and passive components. The situation today is that the factories that make certain components can’t make enough of them. This squeezes supply chains and ramps up the price, creating a high level of inflation passed down the supply chain.
The surge in semiconductor and passive component demand has reached an inflexion point. Demand has outstripped supply for many components, leading to car manufacturing lines shutting down and companies delaying product launches.
Tailwinds fuelling demand
- Smart vehicles
- Consumer electronics
- Military technology
- Internet of Things
- Data centres
- Artificial intelligence and robotics
At no other point in history has there been so many exciting technologies developing at the same time. However, while exciting, these technologies are putting strain on the electronic components supply chain.
Passive components include resistors, capacitors, inductors, and transforms in various specifications. There are thousands of makes and unit models. They are essential to making electronic circuits. Without passives, there are no circuits!
Cars, electronics, satellites, 5G, data centres, Internet of Things, displays, and everything else powered by electricity, depends on passives. As devices get smarter, more components are needed, creating a cycle that will only go up.
Certain diodes, transistors and resistors are in shorter supply than in 2020. This is partly because of the coronavirus pandemic, which impacted manufacturing lines. Still, many manufacturers also shifted manufacturing investment to active components with a higher margin, creating a supply imbalance.
Even without these significant bottlenecks, the supply of passive components is downward while demand goes up. For example, a typical smartphone requires over 1,000 capacitors and cars require around 22,000 MLCCs alone. We’re talking billions of passive components in just two sectors.
Semiconductors (chips, in this case, not the materials) are integrated circuits produced on a piece of silicon. On the chip, transistors act as electrical switches that can turn a current on or off. So, semiconductors and passives are linked.
Chips are effectively the brains of every computing device. Demand for chips is increasing as circuits become more complex. While chips are getting smaller, manufacturing output is only slowly increasing, creating a supply shortage.
The semiconductor shortage was years in the making, but things came to a head when the coronavirus pandemic hit.
At the start of the pandemic, vehicles sales dived. In response, manufacturers cancelled orders for semiconductors and other parts. Meanwhile, electronics sales exploded, filling the semiconductor order book left by the automotive sector. When vehicle manufacturing ramped up again, there weren’t enough chips to go around.
Manufacturing limitations are confounding the problem. It takes 3-4 years to open a semiconductor foundry or fabless plant, but investment in new plants in 2018 and 2019 was low. So, new plants are few and far between.
10 November 2021
Global silicon chip shortage will last until at least 2023
How long will the global silicon chip shortage last? If you were to ask ten CEO's of leading technology companies, you'd probably get ten different answers.
However, there's one timeframe most CEO's quote…
2023 is the date CEO's are optimistic about
Intel's CEO, Pat Gelsinger, has given us a realistic timeframe for the chip shortage to end - he says the chip shortage won't end until 2023.
"We're in the worst of it now; every quarter next year, we'll get incrementally better, but we're not going to have supply-demand balance until 2023," Gelsinger told CNBC.
Gelsinger's thoughts echo those of Glenn O'Donnell, a vice president research director at advisory firm Forrester, who says the chip shortage will last until 2022.
"Because demand will remain high and supply will remain constrained, we expect this shortage to last through 2022 and into 2023," O'Donnell wrote in a blog in March.
Daimler chairman Ola Källenius also believes the chip shortage could last until 2023.
"Several chip suppliers have been referring to structural problems with demand," Källenius told reporters during a roundtable event ahead of the Munich IAA car show. "This could influence 2022 and (the situation) may be more relaxed in 2023."
What will chip demand look like in 2022-2023?
In July, the CEO of STMicroelectronics provided insight into what we can expect in 2022-2023, "Things will improve in 2022 gradually, but we will return to a normal situation ... not before the first half of 2023," he said in an interview.
The global silicon chip shortage has led to car plants shutting down, paused manufacturing lines and delayed product launches. It isn't a short-term problem, and no one knows for sure when supply will start catching up with demand.
All industries and companies that use chips have been affected by the shortage - even Samsung, the world's biggest computer-chip manufacturer, has been affected by it, delaying the launch of several Galaxy and Note smartphones.
Most experts agree that 2022 will echo 2021, with moderate-extreme shortages of integrated circuits and chips, as well as certain active and passive components. Prices are also expected to rise in line with raw material costs.
2023 may be the year that supply starts meeting demand, but it will require the mass opening of foundries and factories. Investment in new plants and manufacturing lines is ongoing, with new fabs set to open in the next two years.
In 2023, we hope to see regular chip inventory levels and average delays of about three months to replenish components. At the moment, some components have delays over a year, and inventory supplies for chips are running low.
Keeping supply chains moving
The best way to keep supply chains moving is to partner with an electronic components distributor like us. We can source chips from around the world, tapping into stockpiles and inventory that isn’t available to the average company.
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 to chat with our team.
29 September 2021
Communications including 5G will drive the components market
According to IC Insights, the communication sector’s share of integrated circuit sales reached 35% in 2020 and is expected to grow to 36.5% by 2025. For perspective, the automotive sector’s share of integrated circuit sales was 7.5% in 2020 and will grow to 9.8% by 2025 - significantly less than communications.
What’s driving such high demand for ICs in the communications sector?
There are four big tailwinds:
- Edge computing
- Internet of Things
- AI (artificial intelligence), MI (machine learning) and data analytics
5G is the main driver for components demand, with 5G infrastructure rollout happening slowly, but surely. We are nowhere near a complete version of 5G, and networks are in a race against time to deliver a reliable service.
The first step for networks is replacing low-band 4G spectrum, followed by mid-band spectrum that uses 2.5, 3.5 and 4.5 GHz, enabling faster data speeds. The final step is the rollout of millimetre wave, which enables true 5G speeds. Millimetre wave also happens to be a precursor for next-generation 6G.
On top of 5G infrastructure rollout you have more 5G-enabled devices coming to market, such as smartphones, tablets and laptops. Smartphones, in particular, are leading the way for 5G adoption, putting faster data in our hands.
The rapid growth in IC demand in the communications sector also stretches to other components like modems, memory and antennas. 5G isn’t just an IC boon - it’s a boon for all the electronic components needed for 5G.
Second to 5G we have edge computing, which by a miraculous twist of fate is needed to deliver a 5G experience (and needs a whole lot of components).
Edge computing puts compute capabilities relatively close to end users and/or IoT endpoints. In doing so, it reduces latency, while 5G delivers faster data speeds, providing a seamless experience on certain devices.
Internet of Things
IoT describes a network of connected smart devices that communicate with each other. For example, a vital sign monitor in a hospital could communicate with medicine dispensers and automate medicine dosages for doctors.
The Internet of Things has been talked about as a trend for several years, but we now have real applications that are useful.
AI (artificial intelligence), MI (machine learning) and data analytics
AI (artificial intelligence), MI (machine learning) and data analytics require enormous, powerful data centres to power them. These data centres require significant investment in chips, memory and other electronic components.
Also, AI, MI and data analytics need cloud computing, edge computing and in some cases 5G to deliver a real-time experience.
By 2025, the communications sector is forecast to have a 36.5% usage share of integrated circuits, making it the biggest consumer of semiconductors.
Demand for integrated circuits, discrete circuits, optoelectronics and sensors will grow to an all-time highs thanks to the industry tailwinds in this article. The future is bright, but to stay ahead, a robust supply chain will be needed.
Electronic components distributors like Cyclops are helping supply meet demand, while the communications sector battles to secure chip orders. Call us today at +44 (0) 01904 415 415 or email firstname.lastname@example.org
22 September 2021
Causes of IC Shortage
There’s a serious shortage of integrated circuits affecting every corner of the electronics world. Discrete circuits, optoelectronics and sensors are also experiencing shortages, putting pressure on supply chains from top to bottom.
What are the causes of IC shortages? This article will explore the main causes, so that you can understand what’s going on.
The coronavirus pandemic reshaped demand for semiconductors, shifting automotive demand to device demand (car plants shut down, while demand for electronic devices soared with stay at home and remote working).
Now that automotive production is ramping back up, there aren’t enough ICs to go around, causing a shortage across all industry sectors.
The pandemic also caused short-term, unplanned plant shutdowns and labour shortages, reducing the number of ICs manufactured.
The logistics industry is still recovering from COVID-induced shutdowns and travel restrictions. While air and sea freight is running at good capacity, road transport is proving difficult across borders, creating supply constraints.
In 2020, air cargo capacity saw a 20% decline. In 2021, it’s back to normal, but you still have the problem of moving components on the ground.
In the UK, there is also a serious driver shortage underway that is affecting everything from electronic components to supermarket shelves.
The amount of time that passes between ordering semiconductors and taking delivery has increased to record levels. In July 2021, it surpassed 20 weeks, the highest wait time since the start of the year and eight days longer than June.
Longer lead times can be caused by a variety of factors, but in this case it’s caused by foundries running at capacity with no room for acceleration. Labour shortages and problems getting hold of materials are exasperating the problem.
A shortage of raw materials is causing big problems for semiconductor manufacturers, who can’t get the materials they need to meet demand. Shortages of raw materials and high raw material prices are combining to squeeze production.
The soaring price of raw materials is also increasing the prices of ICs, with some components seeing a yearly price increase up to 40%. These costs will eventually slosh back to consumers who will have to stomach higher prices.
Whether we’re talking about the communications, automotive or consumer electronics sector, IC stockpiling has exploded. The world’s biggest manufacturers have stockpiled huge quantities of components for themselves.
This ringfencing of components by nervous manufacturers eager to secure inventory takes a significant volume of components off the open market, squeezes the supply chain, and gives the biggest players an upper hand over everyone else.
For all their bad press, China make a lot of chips - around a billion a day. Their biggest chipmaker, SMIC, was hit by US sanctions in late 2020, eliminating SMIC chips from the US market. You’d think this would mean more chips for the rest of the world, but China recoiled and went defensive, keeping most of the chips for themselves.
US sanctions twisted the global supply chain out of shape, creating volatility in an industry that was already in turmoil from the pandemic.
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.
28 May 2015
3D Integrated Circuit Testing
Duke University in North Carolina are undertaking an interesting project looking into 3D Integrated Circuits and how they can be better tested and then improved upon. Until testing procedures are fully developed, the adoption of 3D ICs won't be able to reach their potential.
“Test challenges for 3D ICs must be addressed before high-volume production can be practical. Breakthroughs in test technology will allow higher levels of silicon integration, fewer defect escapes, and commercial exploitation.” said Krishnendu Chakrabarty, professor of Electrical and Computer Engineering at Duke.
When manufacturing using stacked technology, it is important to stack known good dies. This is really important in order to achieve quality products and return a good manufacturing yield. But due to Through Silicon Vias (TSVs) and micro bumps being so small, they are difficult to test at the pre-bond stage. The Duke team have come up with a solution which probes multiple micro bumps at the same time – this shorts the TSVs which in turns forms a TSV network. Aggregated measurements from these TSV networks can be used to detect any defects in the TSVs themselves.
The research done by the team at Duke University has led to three US patents and has attracted the attention of several semiconductor and electronic design companies who are collaborating with Duke on this project. There is at least one company who are prepared to have measurement data on chips available later in the year. This research should lead to some major developments with 3D ICs which in turn will lead to better performance and better products.
Enter Electronic Component part number below.