Global Electronic Component Shortage: Solutions to Stay Ahead

The shoppers’ panic that resulted from the COVID-19 pandemic is still a vivid memory, especially the shortages of essential household products. We can all relate to the shock of empty shelves at supermarkets and one-per-household limits on paper goods. At one point, I found myself using a milk crate to reach the lucky last roll of paper towels on a hard-to-reach shelf. 

We are now seeing the repercussions of a different kind of shortage, but this one doesn’t involve cleaning supplies and paper products. Electronic components’ makers face some severe supply chain issues as the demand for semiconductors is spiking worldwide. Let’s take a look at some of the causes of this global electronic component shortage and how you can guard yourself against the effects.

Some Background Information on Microchip Manufacturing

The semiconductor industry uses silicon wafers as its foundation for building microchips, which are laid out in arrays on the wafers for manufacturing. Through the years, chipmakers have continually introduced larger wafer sizes to support newer and more complex devices as they are invented to increase overall productivity. At one time, the 100mm wafer was the standard, followed by the 150, 200, and now the 300mm wafer. Most newer chips are designed for the larger 300mm wafer, with the expectation that most production would eventually transition to this standard.

Unfortunately, the expectation that the 300mm wafer would take over the production didn’t happen, and older semiconductors are still manufactured on smaller wafers. A prime example of this is the microchips used for the different control systems within an automobile. These components have been manufactured for a long time, and their production is fine-tuned for the older 200mm wafers. Customers are understandably hesitant to migrate from production processes proven to be reliable. It takes time and money to transition a chip design to a different format, which is one reason for the current electronic component shortage.

The Source of the Global Electronic Component Shortage

When the COVID 19 pandemic hit early in 2020, people stopped traveling to shelter at home. The shelter-in-place orders seriously impacted the automobile industry, which quickly reduced its production quotas to match sales projections. Simultaneously, there was a massive increase in consumer electronics demand to support people working and schooling from home. Computers, cell phones, display devices, and entertainment systems were suddenly in high demand, and the chip makers responded accordingly by switching their production capabilities.

Surprisingly, the automobile industry recovered much faster than expected. However, as carmakers ramped up production, they discovered that the microchip foundries couldn’t supply demand. Older production lines had been upgraded to build new chips for the booming consumer electronics market. Carmakers weren’t able to find adequate 200mm production facilities. This shortage resulted in many automobile companies slowing production, and in some cases closing factories. Chipmakers are now trying to recover and supply all demands, but it takes time to build new manufacturing facilities and scale production. Meanwhile, microchip shortages are growing.

How the Microchip Shortage Could Impact the Global Supply Chain

With such a high demand for microchips in the consumer electronics, automobile, and IoT markets, chipmakers are doing everything they can to meet needs. This effort includes new production facilities and streamlined manufacturing processes, but it will take time before these measures can help. For now, semiconductor manufacturers are building parts in the highest demand while cutting production of those that are not. In many cases, older components with similar functionality are being discontinued in favor of their newer counterparts.

Changes like these can significantly impact electronics OEMs that rely on these older parts for their products that are still in production. If the replacement part is very different in size, shape, and functionality, it can result in a board redesign to accommodate the replacement. For electronics used in medical or aerospace fields, these redesigns can force products to be revalidated for service—a time-consuming and expensive process. New designs can also be affected if they reuse previously designed circuitry known to be good but with older parts.

The question is, how can electronics OEMs guard themselves against these problems?

Using Reliable Sources for PCB Components

One of the best ways you can stay ahead of the component shortage problem is to work together with a locally based PCB contract manufacturer to build your circuit boards:

• They will have a very rapid response time to your needs.
• They are staffed with procurement specialists who understand the component supply chain.
• They will begin sourcing components ahead of production to keep your build on schedule.
• Their engineers will help you find circuitry alternatives that eliminate the need to use older, possibly obsolete parts.
• They will stock up on parts needed for your board to keep it in production.

Working with locally based PCB CM can make a difference when navigating these global electronic component shortages. At VSE, our procurement and engineering teams keep tabs on the component supply chain, so they know when critical devices’ life-cycles are changing. We take the necessary steps to keep you ahead of component shortages that might jeopardize your circuit board’s production.