Navigating the complexities of semiconductor product lifecycles – Electronic Products & Technology
The semiconductor industry is the backbone of modern electronics, but managing product lifecycles in this fast-evolving sector is no small feat. From ensuring long-term availability to addressing supply chain disruptions, the challenges are as diverse as they are critical.
In this Q&A, we sit down with Rochester Electronics, a global leader in semiconductor lifecycle solutions, to explore their insights on navigating the complexities and supporting customers through every phase of the product lifecycle.
What are the biggest challenges in managing lifecycles?
As silicon fabrication technology advances, older processes are phased out. Due to limited equipment and expertise, producing legacy components is challenging.
The shift to advanced silicon fabrication reduces the availability of raw materials and equipment, causing suppliers to phase out older materials and machinery, which creates sourcing challenges for legacy systems and raises obsolescence risks.
These changes accelerate component obsolescence. Thus, manufacturers seeking efficiency and reliability often adopt new processes that are incompatible with older components like PLCC and PQFP.
Innovations can render legacy components obsolete, as new materials provide improved performance, such as higher thermal stability and enhanced conductivity. This shift may result in the discontinuation of older materials, complicating production and support for legacy components.
Component manufacturers often discontinue unprofitable parts as demand shifts to newer technologies, focusing on in-demand parts with better profit margins. Producing small quantities of obsolete items can be cost-prohibitive.
Obsolete components can disrupt supply chains, affecting production schedules and complicating sourcing authentic, quality replacements.
Addressing component obsolescence can lead to added costs for redesign, re-certification, sourcing new components, and retraining, straining budgets and affecting timelines.
How has the supply chain evolved, and how has it impacted obsolescence?
The COVID-19 pandemic revealed weaknesses in the semiconductor supply chains, leading to panic and overordering as sectors sought critical components amidst supply constraints. Challenges intensified from wafer fabrication to testing, with wafer procurement becoming especially difficult and lead times increasing over fourfold due to factory worker shortages.
Geopolitical events have severely threatened industry supply chains, constraining critical materials such as aluminum, nickel, palladium, titanium, and automotive wire harnesses.
The semiconductor industry faces challenges with rapid component obsolescence and Pb-free assembly, leading to OSAT consolidation. Current EOL and last-time-buy issues arise from a focus on new products after a market boom, while CHIPS Act investments emphasize leading-edge technologies over legacy products.
The market has shifted from oversold to undersold, with a prolonged downturn in 2024.
Why is semiconductor lifecycle management critical for the aerospace, automotive, and healthcare industries?
Due to their reliability, legacy systems in industries like aerospace, automotive, and healthcare must be preserved. Replacing them with untested systems can pose risks, lead to regulatory issues, and cause costly failures, including high expenses for new equipment and training.
Component obsolescence challenges designers by threatening legacy systems with outdated parts. They must balance finding obsolete components and integrating modern technologies.
How can OEMs / designers mitigate risks?
Proactively addressing component obsolescence is crucial for smooth operations. Tools like Z2Data and Accuris can track component lifecycles and end-of-life dates, helping organizations forecast and manage obsolescence-related costs effectively.
Predicting EOL is unreliable despite tracking component lifecycles. Unforeseen events like supplier consolidation or natural disasters can disrupt forecasts. Over 30% of discontinuations occur without prior warning, going directly from active to EOL.
Component obsolescence and requests for ‘Last-Time-Buys’ require customers to predict future equipment sales, but these forecasts can be unreliable due to unforeseen market changes.
Sharing the Bill of Materials (BOM) with component suppliers helps customers identify project risks and proactively plan to mitigate obsolescence.
How can OEMs balance the need for innovation with the challenge of supporting legacy systems?
Successful long-term system companies balance their designs by anticipating semiconductor changes. They maintain communication with aftermarket manufacturers and providers to prepare for shifts before LTB notices.
What role do third-party suppliers play in ensuring the availability?
Product lifecycles can outlast the availability of semiconductor components, making lifecycle status essential in the new product introduction (NPI) process. If critical components reach end-of-life (EOL) before the product matures, a reliable long-term supply chain for semiconductor lifecycle solutions is necessary.
When the original component manufacturer (OCM) discontinues a product, they often offer a ‘Last-Time Buy.’ However, customers might struggle with the cost, volume requirements, or storage for future needs.
Unprepared companies face risks of counterfeits and quality issues. Authorized distribution players can provide a dependable source with storage solutions. Partnering with a licensed semiconductor maker can reduce the risks of component EOL by enabling the production of discontinued devices.
What are the key elements of a successful obsolescence strategy?
It begins at the design and product definition phases. We’ve all heard stories of products launched with obsolete components, especially affecting customers with long development cycles.
Choosing the right component technology and supplier is crucial for long-term availability, and the lowest-cost options may not be the best choice.
Some key points to consider include: What is the component’s lifecycle status during the application’s lifetime? Are the design’s key components fully documented? Can true design files be archived for rebuilding if needed? And, does the design include proprietary intellectual property?
What are the key considerations to understanding the total cost of obsolescence?
It’s important to identify whether or not the product project plan needs a refresh or redesign funding? You must also consider what impact component obsolescence might have on after-sales service, and will a shortened lifecycle affect customers and end-users.
How do you plan for obsolescence and resource management?
If your equipment has extended qualification, production, or in-service lives, you will face component obsolescence. Organizations should devote skilled, multi-disciplinary workers to obsolescence management. Preventive planning can reduce or eliminate costs and risks.
Identifying PDNs
It is imperative to identify Product Discontinuation Notices (PDNs) that may affect your business. Proactively monitoring component lifecycles is essential for anticipating issues. Reliable commercial tools track lifecycle stages, lead times, and specification changes and provide alerts for PDNs.
Some key questions to ask yourself include: Will your sub-tier suppliers share their BOMs; and do they have adequate obsolescence management processes?
While many component electronics manufacturers offer proactive component lifecycle management as a service, others are entirely reactive.
Last Time Buy (LTB) – Forecasting
Forecasting is inexact, making it hard to predict product needs and market disruptions. Underestimating can lead to premature terminations while overestimating results in excess costs. Future redesigns should account for design, requalification, and engineering resource costs.
100% Authorized suppliers
Many think only grey market sources exist for discontinued components, however, authorized after-market suppliers serve as safe choice.
Counterfeit and poor-quality components from unauthorized sources harm production yields and Mean Time Between Failure Rates (MTBR). Inferior testing by unauthorized third parties leads to a false sense of confidence in authenticity.
Unauthorized component risks include:
- Poor handling can cause ESD damage and device failure.
- Inadequate storage may lead to corrosion and moisture issues: lead corrosion, failed solderability, moisture ingress, and device failure.
- Fake documentation that mimics the original specification or misrepresents performed tests.
- Recovered, re-marked, or repackaged components.
Learn more at www.rocelec.com