Art of predicting component obsolescence

Rochester Electronics’ product and technology solutions manager, EMEA, Ken Greenwood helps electronics buyers address the last time buy dilemma.

Rochester Electronics’ product & technology solutions manager, EMEA Ken Greenwood

As semiconductor manufacturing technology advances, older, less profitable lines are pruned. In long-term system markets, obsolescence is inevitable. Proactivelymonitoring component lifecycles for components used directly by customers, plus those used in purchased subsystems, is crucial for anticipating problems.

Commercial tools can track a component’s lifecycle, lead times and specification changes, providing alerts for product discontinuation notices (PDNs). Predicting an end-of-life date remains an inexact science. Algorithm-based predictions have severe limitations. Since the semiconductor allocation crisis in the early 2020s, PDNs have been increasingly imprecise and short-dated.

Component discontinuations, under any circumstances, trigger an inevitable and costly last time buy (LTB). Abrupt and unexpected PDNs are always a challenge. Customers need to always consider:

  • Future market needs, including in-service support
  • Redesign/replacement product timetables and reengineering/ requalification costs
  • Financial impact of purchased stock, plus cost of specialized storage. Sometimes, this tied-up cost limits LTB size regardless
    of the factors above
  • Lost opportunity costs from premature product discontinuations, especially where this might provide a competitive opening in a secure market

Underestimating needs has a risk of premature product termination. Overestimating needs unnecessarily ties up capital in excess stock and storage costs.

How can customers best prepare for an unpredictable semiconductor discontinuation landscape?

  • Seek multiple sources for in-depth risk assessments of critical components to understand market, fab technology and packaging risks
  • Build relationships with authorized after-market semiconductor supply and manufacturing specialists, such as Rochester Electronics. Engaging in discussionsduring the LTB process lets them consider investing in finished goods as a safety net if market conditions change or the customer’s LTB purchase falls short
  • Risks of counterfeit and poor-quality components from unauthorized sources represent a significant risk to production yields and MTBF rates in the field. Inferior or substandard testing by unauthorized 3rd-parties provides false confidence that authenticity can be tested. This mimicry of testing is a visual, x-ray or poor partial copy of the original manufacturer’s test processes. Full tri-temp testing is rare, with the risk of components being re-marked as industrial, automotive or military parts always present. Instead, find manufacturers that are 100 per cent certified by the original component manufacturers (OCMs)

When a device’s product lifecycle extends beyond its active availability, authorized aftermarket distributors and licensed manufacturers, such as Rochester Electronics, provide a risk-free long-term source for semiconductors.

They are an indispensable authorized partner supporting:

  • Stock to overcome market shortages or long lead times
  • A trusted source for obsolete components
  • Long-term manufacturing from wafer of selected product ranges

Partnering with a licensed semiconductor manufacturer can mitigate the risks of component EoL. A licensed manufacturer can produce devices no longer supplied by the OCM. When a component is discontinued, the remaining tested wafer and die, assembly processes and original test IP, are transferred to the licensedmanufacturer by the OCM. This means that previously discontinued components are still available newly manufactured and 100 per cent in compliance with the original specifications.