Predicting Component Obsolescence with Rochester Electronics
The Last Time Buy Dilemma
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s semiconductor manufacturing technology advances, older and less profitable lines are pruned. In long-term system markets, obsolescence is inevitable. Proactively monitoring component lifecycles for components used directly by the customer, as well as those used within purchased subsystems, is crucial for anticipating problems. Luckily, commercial tools that track a component’s lifecycle, lead times, and specification changes are available. Such tools can provide alerts triggered when Product Discontinuation Notices (PDNs) are issued. However, predicting a component’s end-of-life (EOL) date is 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. Recently a 3rd party fabricator who gave their semiconductor client one month’s notice before closure is an example of where both wafer-fabs and packaging houses are reassessing profitability.
Component discontinuations, under any circumstances, trigger an inevitable and costly Last Time Buy (LTB). Abrupt and unexpected PDNs are a challenge to even the most established LTB processes. Customers need to always consider: • Future market needs, including in-service support. • Redesign and replacement product timetables, and reengineering and requalification costs.
• The financial impact of purchased stock, as well as the cost of specialized storage. In some cases, this tied-up capital cost is a limit to the size of the LTB 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 tie up capital in excess stock and storage costs.
How can customers best prepare for an unpredictable semiconductor discontinuation landscape? 1. Seek multiple sources of market information, that can provide in-depth risk assessments for critical components. It is vital to have a detailed understanding of the overall market, fab technology, and packaging risks surrounding key components.
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2. Build relationships with authorized after-market semiconductor supply and manufacturing specialists, such as Rochester Electronics. By engaging them in discussions during the LTB process, they can assess whether to make parallel and complementary investments in finished goods. This investment provides a potential safety net if markets change, and the customer’s LTB purchase proves to be insufficient. It is not unusual for after-market suppliers to continue supplying authorized, 100% compliant, risk-free components 20 years or more after the original PDN.
3. The risks of counterfeit and poor-quality components from unauthorized sources represent a significant risk to production yields and Mean Time Between Failure 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 rarely offered, and the risk of commercial-grade components being re-marked as industrial, automotive, or military parts is always possible. Instead, find manufacturers that are 100% certified by the Original Component Manufacturers (OCMs).
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