Showing posts for February 2022
23 February 2022
The global electronic component shortage – what happened?
Arguably the biggest ongoing crisis in the tech industry is the global semiconductor shortage. You can’t go far online without seeing news about it, and many people have seen it firsthand when trying to buy a brand-new car, or a recently released games console.
When did it start?
The obvious factor contributing to the shortage is COVID-19. The virus infected millions and sent the world into lockdown, which then led to the housebound masses logging in and going online.
At the start of lockdown in March 2020, 60% of 18-24-year-olds were increasing their use of home delivery instead of leaving the house. Amazon’s revenue also rose at a quicker pace than in previous years, with the company making $88.91 billion in Q2 2022.
Alongside the increase in online shopping came an increase in other digital activities like PC and console gaming. In the last quarter of 2020 desktop, notebook and workstation sales rose to a record 90.3 million units. Tech company Sony saw 25% of its revenue come from game and network services, and around 18% from electronics products and solutions.
In another case of bad timing, both Microsoft and Sony were about to release their next generation of game consoles, and Nintendo Switch sales were booming. All of this meant demand for components was skyrocketing.
This then led to delays in car manufacturing. Why? Because all the available chips were being bought up by computer and electronics manufacturers, so there were none left for the automotive industry. A car part may need between 500 and 1,500 chips, and are used for many parts including the dashboard display and to control the airbag.
There were other elements that contributed to the shortage before this: The US and China had been imposing increasingly high tariffs on each other for the past two years, and natural disasters and fires took out several factories in Japan, Taiwan and China.
When will it end?
The comeback from the semiconductor shortage will not be quick. Some factories that were shut down by natural disasters are still repairing the damage and trying to reopen production. But as the demand is staying high, there will need to be new facilities created to cater for the increase in demand.
The time, expertise and money needed to start a new factory will be too much for smaller firms to manage, so then the hole in the market needs to be filled by larger corporations like Intel and Samsung. Both companies currently have plans to open new fabs in America, but it will be a while before they can start production.
Intel’s ambitious plan to construct the one of the largest chip factories ever in Ohio would alleviate demand, but is not due to start production until 2025. Similarly, Samsung’s Texas fab will not be operational until 2024.
Despite smaller factories opening, the substantial backlog will not be solved by these alone. There will need to be a combination of an increase in production, time efficiency and, with the pandemic in mind, automation to decrease person-to-person contact. There will also need to be a stock of chips manufactured to avoid shortages in future.
The speed at which technology is currently being developed also puts manufacturers in a tight spot. Not only are more electronic devices being produced all the time, but the technology of the components within them is also advancing quickly.
While it is difficult to forecast entirely, experts say the shortage could last a few more years. Hopefully with the opening of the larger plants estimated for approximately the same time, the chip shortage might be mitigated by 2025.
We can help
The market is currently just as competitive in the case of other electronic components, but Cyclops can help. With our extensive stock of day-to-day and obsolete components we can supply you when others cannot.
For all your component needs, contact Cyclops Electronics today at firstname.lastname@example.org. Or submit a rapid enquiry through our website.
16 February 2022
The European Chips Act and its impact on electronic component sales
Semiconductors are vital for our day-to-day life. They are in all the electronics you own but are also in your kitchen appliances, your car, your electric shower and many more. But what if we lost access to these components?
The huge reliance on imported semiconductors was made abundantly clear last year. Europe’s current share of the global semiconductor market is only about 10%, and the continents is otherwise dependent on supply from abroad.
The need for independence and autonomy in the European chip market has been made very apparent due to factors like Brexit and COVID-19.
The European Chips Act was first mentioned in the EU’s 2021 State of Union Letter of Intent, calling the act a key initiative for 2022. The EU created the Industrial Alliance for Processors and Semiconductor Technologies alongside it, to plan and oversee progress on the act.
One of the aims of the alliance is to increase Europe’s share in global chip production to 20% by 2030, but they will first have to identify issues with the market and map out a way to improve design and production.
During the ‘State of the World’ Special Address by European Commission president Ursula von der Leyen on January 20, the chips act was mentioned once again, and they announced draft legislation for the chips act is due in February of this year.
The European Commission president said that there would be five steps taken to improve the chip sector, and that they would focus on research first, then design and manufacturing. After these there would be an adaptation of state aid rules to increase provisions in case of shortage. Lastly, she said the EU would work to support smaller, innovative technology companies.
In 2020 the United States accounted for the largest share in the semiconductor industry, with 47%. Following the US was South Korea with 20% of the market. China’s share has also increased quickly in recent years, putting it narrowly behind Korea. Despite Japan previously having a larger share in the market, they are currently on equal footing with Europe with a share of around 10%.
Despite no longer being a member of the EU, and therefore not directly signing the Chips Act, the UK could also have the potential to increase its standing in the global semiconductor race.
According to some UK-based chipmakers, the country has an advantage in the area of research and development. If research facilities like the University of Manchester were given the right attention and funding, they could develop sustainable resources like graphene to replace mined silicon in processors.
The UK electronics sector will always be considerably smaller than huge countries like China and America, but with significant investment they would have the ability to make a difference in the current chip shortage. And Cyclops is a perfect example of a smaller company making a big difference.
Cyclops is an electronic component distributor with a wealth of contacts from all over the world. With unrivalled stock and suppliers, Cyclops will put you ahead of your competitors. Contact us today at email@example.com.
14 February 2022
Obsolete components and where to find them?
Obsolete electronic components are, despite the name, still widely used and required for manufactured products. The term obsolete often denotes something out of date or out of use. While these electronic components are classed as out of date, they are still used long after their so-called expiry date.
As companies try to keep up to date with the latest technological advancements and customer needs, many original equipment manufacturers (OEMs) will stop producing their older components and move on to manufacture the newest, high-profit electronics.
These older, no longer produced components will soon become obsolete and will be classed as end of life by their OEM, who will release a formal product change notice (PCN) for its customers.
But obsolescence does not stop companies from using a component. There will already be many products that use the component and will still require it. The demand will continue but the stock will shrink, causing the price of these end-of-life components to increase and drive competition to acquire them.
There are a few ways to bypass the need for obsolete components, but it will always be a case of balancing the cost to the benefits.
One option is a drop-in replacement, which is designed to be compatible with an existing product. This, however, can be time-consuming or costly, or both, depending on how many components need to be sourced.
There may also be the option for crossing, or cross-referencing, the obsolete electronic component. A different manufacturer may produce a component very similar to one no longer produced, or there could be an alternative part number which results in a usable substitute. There is always the risk that there is no viable substitute, though, or the alternatives are also obsolete.
Despite the high price for obsolete components, it’s likely that it would still be cheaper for companies to source these discontinued parts than to re-design their whole product around a new component. As such, people looking for obsolete components are often competing with many others and need to find reliable, trustworthy sources of stock.
Among the many companies offering to source obsolete components, there will be some that are untrustworthy. Buyers risk exposing themselves to faulty, counterfeit or overpriced products if they are unable to find a reliable, certified re-seller.
A Cyclops Excess speciality is buying obsolete components from suppliers who have ended up with slightly more than they needed. As a result, our Excess stock includes a huge variety of hard-to-find obsolete electronic components that are still sought after today.
All of Cyclops’s stock is quality checked and as an independent stockist we can buy and sell components according to our customer’s needs. If you’re on the look-out for regular or obsolete electronic components get in touch today at firstname.lastname@example.org, or use the rapid enquiry form available on our website here.
10 February 2022
Latest electronic component factory openings
We’ve all heard about the shortages in standard components like semiconductors and chips. Cars, phones and computers, items we use every day, are no longer being produced at the speedy rate we’ve come to expect. The cause of this shortage is, in part, due to the COVID-19 pandemic.
To combat this shortage many electronic component manufacturers have announced the opening or development of new factories. This is especially noticeable in Europe and America, where production has often been outsourced to Asia in the past.
So who are the latest companies expanding operations, and how much are they spending? Check out our quick run-down of factories and when they should open:
Location: Ohio, USA
Completion date: 2025
Cost: $20 billion (£14.7 billion)
The latest, and possibly greatest, announcement on our list comes from Intel. The corporation revealed in January that they would be committing to building two chip manufacturing plants in New Albany, Ohio. The move is said to be due to supply chain issues with Intel’s manufacturers in Asia, and should boost the American industry with the creation of at least 3,000 jobs. Construction should begin this year.
Company: Samsung Electronics
Location: Texas, USA
Completion date: 2024
Cost: $17billion (£12.5billion)
The household name announced late last year that they would begin work on a new semiconductor-manufacturing plant in Taylor, Texas. The Korean company stated the project was Samsung’s largest single investment in America, and is due to be operational by the middle of 2024.
Location: Villach, Austria
Completion date: 2021
Cost: €1.6 billion (£1.3 billion)
After being in construction since 2018, Infineon’s Austrian plant became operational in September last year. The chip factory for power electronics, also called energy-saving chips, on 300-millimeter tin wafers began shipping three months ahead of schedule in 2021, and its main customer base will be in the automotive industry.
Location: Gdańsk, Poland
Completion date: 2022
Cost: $200 million (£148 million)
The Swedish battery manufacturer is expanding its operations with a new factory in Poland. While initial operations are supposed to begin this year producing 5 GWh of batteries, it hopes to further develop to produce 12 GWh in future. Northvolt has also just begun operations at its new battery factory in Skellefteå in Sweden.
Location: Hà Tĩnh, Vietnam
Completion date: 2022
Cost: $174 million (£128 million)
The Vietnamese electric vehicle manufacturer is due to start production at its new factory later this year, where it will produce lithium batteries for its electric cars and buses. The factory will be designed to produce 10,000 battery packs per year initially, but in a second phase the manufacturer said it will upgrade to 1 million battery packs annually. VinFast, a member of Vingroup, is also planning on expanding operations to America and Germany.
Company: EMD Electronics
Location: Arizona, USA
Product: Gas and chemical delivery systems
Completion date: 2022
Cost: $28 million (£20.7 million)
The member of the multinational Merck Group is expanding operations with the construction of a new factory in Phoenix, Arizona, to manufacture equipment for its Delivery Systems & Services business. The factory is due to be operational by the end of the year, and will produce GASGUARD and CHEMGUARD systems for the company.
A bright future
These electronic component factory openings signal a great increase in business, and will aide in the easing of the component crisis. But it will take a while for these fabs to be operational.
Can’t wait? Cyclops is there for all your electronic component needs. We have 30 years of expertise, and can help you where other suppliers cannot. Whether it’s day-to-day or obsolete electronic components, contact us today at email@example.com, or use the rapid enquiry form on our website.
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