Showing posts tagged 'production'
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.
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.
22 April 2021
Why We're Facing a Global Semiconductor Shortage
The world is experiencing a semiconductor shortage at a time when demand for semiconductors is at an all-time high. Manufacturers can’t make enough of them and we’re now seeing this affect the availability of products.
You probably remember last year Sony released the PlayStation 5 and Microsoft released the Xbox Series X. AMD released the Big Navi GPU (RX 6000) and Apple released the iPhone 12 range. What all these products have in common is they were all directly affected by the semiconductor shortage. Demand well and truly exceeded supply.
What’s causing the shortage?
A perfect storm has hit the semiconductor market. It isn’t one thing but a combination of different things that’s causing the shortage today.
The COVID-19 pandemic
When the COVID-19 pandemic hit, car and commercial vehicle sales took a hit. Estimates suggest that sales fell by 50% or more within a single month. In response, car manufacturers scaled back orders for semiconductors and other parts.
At the same time, demand for electronics chips soared as more people spent time working from home and on furlough.
Laptops, smartphones, drones, smartwatches, tablets, kitchen appliances - everything has a semiconductor nowadays. Then you have IT, data centres, internet infrastructure and cloud and edge computing. All are powered by semiconductors.
And so, the factories that were at capacity making semiconductors for cars switched to making semiconductors for electronics. This was a blessing in disguise for factories because semiconductors for electronics have a higher margin. However, it has caused a problem for car manufacturers who now need to ramp up production.
The situation now is this - car sales are picking up and car manufacturers are fighting for orders against electronics manufacturers. Factories are at capacity and can’t make enough to go around. This is feeding through to nearly every sector.
Ultimately, this is the result of poor planning from car makers who cut orders too deeply last year at the beginning of the COVID-19 pandemic.
Even before the COVID-19 pandemic hit, there weren’t enough factories to meet semiconductor demand. There were long lead times in 2019 because semiconductor demand outpaced the ability of factories to make them. This problem has persisted through to 2021 and has been compounded by the COVID-19 pandemic.
With most factories running at 99-100% capacity, there is very little room for boosted output. You would think that the solution is to build more factories, but this would not solve the problem today or even a year from now because semiconductor fabs take at least a year to build with another 6-12 months in setup time.
Semiconductor manufacturers are investing in new factories, expansion and more efficient technologies, but short-term solutions these are not.
The US is attempting to bring semiconductor manufacturing to US soil to remedy this or at least reduce dependency on foreign suppliers.
US and China trade war
Calls for domestic manufacturing are heating up in the US and China, the result of a trade war brought about mostly by supply chain disruptions related to the COVID-19 pandemic.
Reports in May 2020 that the Trump administration was in talks with Intel, TSMC, and Samsung about building US chip factories proved true. In 2021, with a new president and Biden administration, these talks are persisting.
The reason a technology trade war broke out between the US and China is because the US imposed a 25 per cent tariff on $34 billion of Chinese imports in 2018. There has been bad blood ever since with threats and action on both sides.
This eventually affected the semiconductor supply chain because in 2020 the US turned to export restrictions targeting the semiconductor supply chain to safeguard critical infrastructure in the telecommunications sector. This followed a 2019 ban on the Chinese company Huawei for “national security reasons”.
For example, one of the consequences of export restrictions was that American firms were cut off from chips made by China's Semiconductor Manufacturing International Corporation - the third largest chip maker in the world with 11% market share.
Local production problems
Factory shutdowns due to natural disasters, bad weather and the COVID-19 pandemic have caused semiconductor supply chain issues.
Most of the world’s semiconductors are manufactured in Taiwan. Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, has a 28% market share. The second largest, UMC, also based in Taiwan, has a 13% market share.
Taiwan is experiencing serious water droughts in 2021. Millions of tonnes of water are required to manufacture semiconductors every week. Taiwan Semiconductor Manufacturing is having to bring water in on trucks and UMC are doing the same. This has caused significant drops in manufacturing efficiency.
The US is also experiencing shutdowns. NXP Semiconductors had to shut its plant in Austin, Texas, due to winter weather in February 2021.
Factory shutdowns cause order backlogs and extended lead times. Orders persist and pile in whether a factory is down or not. This squeezes supply chains, causing a shortage.
How long will the semiconductor shortage persist?
We expect the semiconductor shortage to persist through 2021 but ease towards the end of the year as demand for electronics chips decreases as COVID-19 lockdowns end. This will cause a shift in supply from electronics semiconductors to automotive semiconductors which will provide the industry with a much-needed equilibrium.
The world’s largest semiconductor manufacturers - TSMC, UMC, SMIC, Samsung, Intel, SK Hynix - are investing in increased output. Many investments were in the pipeline as early as 2019 and are expected to yield results at the end of 2021.
Right now, there is a serious imbalance in the demand for semiconductors, one that our existing infrastructure is not built to cope with. This imbalance will ease over time.
How can supply chains continue to meet demand?
If you have been impacted by the semiconductor shortage you can meet demand by partnering with an electronics components distributor like us.
We specialise in the procurement and delivery of semiconductors and parts for a wide variety of industries from the world's leading manufacturers. You can find out more about what we do here. Email us if you have any questions.
14 April 2021
Anglia goes solar with new photovoltaic cell range
Anglia Components has announced a new PCB-mounted photovoltaic solar cell line for electronics applications in collaboration with Anysolar, offering a new way for electronics manufacturers to harness light energy.
The Anysolar PCB-mounted photovoltaic solar cell range can replace battery and mains power for low-power applications. It can be reflow soldered onto PCBs and parts compatible with traditional hand soldering processes.
The advantages of using Anglia’s photovoltaic cells include:
- Clean energy for sensors
- Low cost
- Long lifespan
- No cell degradation
- No emissions from energy production
- Replaces batteries and mains
- Discreet design
- Powered by indoor and outdoor light energy
The technology is based on monocrystalline silicon free from impurities, so the cells do not degrade like traditional solar cells do. This enables a longer lifespan and peak performance, to reduce recycling rates and keep electronics in service.
Anglia has invested in a profile of all the most popular cell sizes and formats of Anysolar’s Gen 3 solar cells. The cells offer a viable alternative power source to battery and mains power for simple sensors. The cell range offers power from 5.5 mA to 1.02 A so is suited to a variety of low-power sensor applications.
Commenting on the partnership, David Pearson, Technical Director at Anglia said, “Anglia is delighted to partner with Anysolar for this new product range which complements many of our established lines, such as low power MCU’s and sensors.”
“Anysolar provides a viable alternative power source for many of our customers applications such as remote IoT sensor nodes.”
KY Choi, President of Anysolar, added, “We are delighted to partner with a distributor that is so well-respected in the UK and Ireland industry. We really value our relationships with our customers and look for partners that share that value. Our solar modules offer Anglia customers an environmentally friendly new power source for their designs.”
How it works
A photovoltaic (PV) cell, also known as a solar cell, generates electricity when exposed to light particles (photons). The Anysolar PCB-mounted photovoltaic solar cell line optimises this process with a large surface area and monocrystalline silicon.
The photovoltaic effect is a physical and chemical phenomenon. When applied to electronics, it can be used to power low-power sensors. This reduces energy draw on a device’s core power source to optimise performance and efficiency.
For devices to become autonomous, PCB-mounted photovoltaic solar cells will also be necessary for energy. IoT devices are a good example. These devices require a self-sufficient power source to run separately from the grid.
In the future, it’s expected that IoT devices will be able to run without wires or batteries and light energy provides the best possible solution.
Anglia’s PCB-mounted photovoltaic solar cell line is capable of powering a wide range of sensors in IoT devices, including robots, drones and consumer electronics. Remote IoT sensor nodes (nodes that collect data and information related to objects passing by, such as in autonomous cars) are a good example of components prime for PV cells.
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