Cover story
How shared information may provide semiconductor customers in the automotive sector with reduced risk sourcing alternatives
By Ken Greenwood, Technical Sales Manager, Rochester Electronics
T
he increasing use of semiconductor electronics in automotive applications supporting new sensors, mapping and connectivity, in parallel with the growth in hybrid-electric and all-electric vehicles, means that the segment is one of the fastest-growing – forecast of AGR of 6%+ over the coming years.
Pre-pandemic, semiconductor supply chains, although complex and worldwide, operated smoothly and reliably; Just-in-Time deliveries throughout were the norm.
How has the supply landscape changed? The last two years have exposed the automotive market’s dependence on this extended supply chain. Factory closures, production capacity shortfalls and shipping constraints mean that supply has never been so uncertain. As the world emerges from the worst of the pandemic, new more permanent uncertainties are appearing as semiconductor manufacturers, and critically the third-party fab houses behind many of them, re-assess their technology and component roadmaps. Over the last two years, third-party fab houses have closed 110nm, 90nm and 45nm processes; and other technology exits are inevitable in the near future. Overall semiconductor product discontinuations rose by 19% in 2020.
06 June 2022
www.electronicsworld.co.uk
Semiconductor lifecycles are clearly shortening, and this represents a growing threat to the entire automotive industry as they need to guarantee 10-20 years of support over the complete production, aftermarket and repair cycle. The spectre of increasing component discontinuations will result in: • More working capital tied up in last-time-buy (LTB) stocks. • More obsolescence-driven re-designs taking engineering resources away from new product designs.
With perfect market forecasts and storage conditions, the extra costs of
LTB component stocks are unwelcome but manageable. However, changes in demand and/or delayed re-designs are more likely to result in component shortages or surpluses at the end of the programme.
How will rising inflation, reduced disposal income and changes in public transport acceptance affect car sales in the future?
The process of re-qualifying automotive systems is onerous, particularly around safety-critical applications, and obsolescence-driven re-designs (which add no additional functionality) should only be considered as a last resort. Automotive customers find themselves having to manage the twin threats of: • Ongoing uncertainty in their active semiconductor supply chains. • Increasing component discontinuations and shorter component lifecycles.
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