January 08, 2019

Electronic Components Shortages, Insights from John Watson

43 minutes

Electronic Components Shortages, or part shortages are so big that it impacts nearly every aspect of electronics design and manufacture. Lead times continue to rise no matter how fast parts are being produced. It is just not possible for production to catch up. The reality of this current shortage means it’s time to be innovative, and guest John Watson has some ideas to help including an expert tip Altium Designer users can put to good use. (Hint: ActiveBOM can help!) Listen in to get background on the electronic component shortage, what pro PCB designers are doing to address the concern proactively and stay ahead of PCB component shortages.

Show Highlights:

Shortages first started with capacitors - specifically with multi-layer ceramic capacitors (MLCC) MLCCs - 3 trillion created a year but the supply is still not meeting demand

This is a major crisis in the industry and its spreading

The part shortages are so big, it impacts every aspect. Shortages affecting: Board sensors, MOSFETs (metal-oxide semiconductor field-effect transistors), Resistors and Transistors. Previously unaffected supply chain areas are now being affected.

No matter how fast these are being produced, not possible for production to catch up.

There are three industries driving the high demand that is leading to part shortages:

IoT - estimated 20 billion new IoT devices in next few years

Mobile phone - 1.5 trillion mobile phones in next year. 1,000 capacitors in each phone.

Automotive - 2,000 - 3,000 capacitors in regular / 22,000 capacitors estimated in electric car - as newer technologies are being pulled into regular automatic cars, just think of all the electronics i.e. safety features, automatic parking, etc.

New automotive organization:

AEC - Automotive Electronic Council is putting out standards that will be required for their components. Why? Because...

More rigorous components are needed in order to perform in harsh environments.

Almost 50% of those components have fallen out, or failed, to meet their tests.

On the component / part manufacturing side:

Converting lines from large components to smaller ones because not many people buying them.

Manufacturers shutting down entire lines so they can produce more popular sizes.

On the vendor side:

Vendors have moved towards part allocation - big companies get first in line for parts.

“You can only buy parts with if you have bought with us in the past year” - this is allocation.

Once a company is in allocation, they begin to stockpile components.

What kind of lead times are most common right now:

Short lead time - 16 weeks

Medium - 32 weeks

Long - 80 weeks

What makes this part shortage so different?

Mainly a market driven shortage, that cannot be pinpointed to a specific material shortage

It’s almost an ‘emotional shortage’ where people may be hoarding more than they need.

The extended duration of it is also unlike previous shortages.

It’s a scenario where the market compounded onto itself with its reaction to it.

HOT TIP: The next big thing is Broadband Satellite. SpaceX and low flying satellites to make everybody wireless. This is huge, it’s a lot of hardware.

Component Shortage Hacks to get through the Crisis:

Overall, be as proactive as possible.

Evaluate common design guidelines and step out of them. For example, can we change the norm values, parameters and tolerances? It doesn’t always require the most stringent guideline, there is room for adjustment, depending on the type of device and requirements.

Be proactive, for example run your schematic through ActiveBOM and get flags on what components are not recommended. Don’t wait until layout, do it early on.

You can also use Octopart, there are other free services.

Leverage your procurement organization, give them the heads up with difficult components so they can be aware of the situation in advance.

Create multiple footprints for designs.

No single sourcing for components, don’t get tied into a single organization.

Where do you source parts or find out about availability during the shortage?

Read the quarterly reports to get the latest, look at the numbers, watch the trend.

Keep aware of the issues i.e. part availability reports

Texas Instruments also has a lot of information.

PCB Component Shortages and using ActiveBom:

“ActiveBOM came out just in time. It has been the go to tool for us.”

Now we run legacy products through ActiveBOM.

Links and Resources:

John Watson Podcast on PLM and Library management

OnTrack article about Part Shortages

Watch John Watson clips on Youtube

Download the latest Altium Designer 19 today.

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By Altium LLC.

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