In this article, Golledge unwraps recent supply chain shocks, then explains how the sector is steadily recovering with reducing lead times and costs.
Q: What major changes has the crystal industry experienced over recent years?
A: The frequency marketplace has been through a storm of issues since 2020 that have affected availability, price and lead times. These issues began with pandemic induced factory shutdowns which caused immediate and major industry disruption.
Shortages caused by shutdowns were exacerbated by further problems, some of which affected different industry sectors as they impacted specific geographies. For example, a drought in Taiwan meant factories were unable to manufacture parts using the water-intensive process required to produce and cut quartz crystals. This caused all Taiwanese products to become scarcer.
Then in October 2020 a devastating fire hit the Asahi Kasei Corporation factory in Japan which previously produced over 80 per cent of ICs used in the supply of higher performance temperature compensated oscillators (TCXOs). This caused huge shortages in the TCXO sector. Most recently, in addition to being a terrible humanitarian crisis, the Ukraine-Russia conflict is beginning to cause shortages of rare metals required for component packages.
Golledge product manager, Nigel Cole, explains these shortage situations mean the ‘just-in-time’ marketplace became a ‘just-in-case’ marketplace with customer demand outstripping supply as buyers purchased stocks ‘just-in-case’ they were needed. Although the marketplace is recovering from these supply shocks, many suppliers have reacted by prioritising manufacturing lines for popular frequency products, causing an uneven recovery.
Q: How are crystal and oscillator lead times currently?
A: Lead time recovery is patchy and differs widely dependant on package size, product popularity and IC type. Some watch crystal lead times are recovering quite quickly: the popular 3215 package size is back to eight to 10-weeks lead time again. However, smaller sized watch crystals are still around 30-weeks. Many TCXOs are also in the process of recovering their lead times, shorter than 16-weeks is now common, but CMOS TCXOs are negatively impacted by a severe shortage of specific ICs and are on allocation. SAW filters have also recovered well and are typically less than 19-weeks for volume orders.
Standard oscillator lead times are variable however, with wait times being heavily IC manufacturer dependant. There is a shortage of LVDS ICs meaning you can expect a >25-weeks for some higher frequencies and supply voltages for a LVDS oscillator. However standard industrial oscillators should have much shorter lead times. In addition to the LVDS shortage, many 7 by 5mm packages are also in short supply due to ceramic supplier Kyocera pulling out of the international ceramic market for these packages. Kyocera is still suppling to their home Japanese market so Golledge is still able to supply through its Japanese manufacturer. However, there is a general shortage of 7 by 5mm oscillators at present.
In addition to recovering lead times, prices are also reducing as the supply-demand balance rights itself. Consequently, buyers can expect those products with recovered lead times to have reduced prices compared with those that are still experiencing shortages. New volume orders for TCXOs can show significant cost reductions for instance.
Q: What sourcing advice would Golledge offer readers?
A: There are still some issues with supply in the frequency market so forecasts are still key. Golledge is much better able to meet customers’ needs if they can provide rough a 12-month forecast. Golledge can also offer buffer stock agreements, which help buyers meet ‘just-in-case’ demand, while not holding stock on-site.
In general, approving a second source is a wise move to increase resilience. Golledge can offer dual component sourcing without needing to approve a second supplier. As part of the Techpoint group, the company also offers manufacturing and prototyping expertise. If buyers need to approve a second supplier for their components, it helps to source from those with added value.