We’ve all heard about the electronic component shortage, and many have felt its effects. In some cases, the new model of the car we want is back-ordered, and the latest “must-have ” video game systems are in short supply. Professionally our home offices are settling for older equipment instead of the latest workstations and peripherals. Even the aerospace sector has been affected by the short supply of new components necessary for satellites and spacecraft, resulting in postponed launches.
The question on everyone’s mind now is how long these shortages will continue. OEMs want to return to full production of their products, manufacturers want to supply customers’ demand, and end-users want access to the latest products. Here we’ll look at the electronics parts shortage, how it is affecting the printed circuit board industry and some ways that designers can work around these problems.
The Latest Updates on the Electronics Parts Shortage
Although a lot of positive news is coming out of the semiconductor industry lately, supply chain experts are warning that the component shortage is not over. Most semiconductor companies are not expecting relief until the second half of 2022, with some parts still being affected into 2023. And while the automotive industry is seemingly bearing the brunt, other industries that rely on microcontrollers, analog, and power management chips are also being hit hard. One such industry is the maker of high-end manufacturing equipment used in the production of semiconductors, which has found itself caught in a vicious cycle. The catch-22 of the situation is that to build new equipment and fabricate the chips, they first need the fabricated chips.
Thankfully other measures are being taken by the semiconductor industry to help resolve the electronic part shortage problem:
- Integrated circuit manufacturers are ramping production up to higher levels, in some cases 95% of their capacity from an average level of 80%. Although this complicates the regular factory processes of scheduled shutdowns for routine maintenance and enhancements, it is necessary to fill the demand.
- Some of the largest semiconductor manufacturers, including Samsung and Intel, are accelerating plans to build component manufacturing facilities in the United States. Texas Instruments recently broke ground in Sherman, Texas, to build a new 30 billion dollar fabrication facility that will begin production in 2025.
However, these efforts are difficult for other industries to understand when considering the time it takes to produce an integrated circuit. A new car may take only a day to roll off the production from start to finish, but an IC is much more complex. The production cycle for an average chip can be up to 24 weeks on the front end, with another eight weeks on the back end for packaging and testing before it is ready for the customer. With the amount of time it takes for chip fabrication and the number of new technologies requiring the latest components, it isn’t surprising to see so many OEMs realigning their manufacturing projections. For example, Sony and Nintendo recently reduced their sales projections for the PlayStation 5 and Switch video game consoles, even though the demand for these products is high. Without the ability to supply the custom CPU and graphics components featured in these products, the demand cannot be met. Next, we’ll look deeper at the impact these shortages have on printed circuit board manufacturing.
How the Shortages of Components are Affecting PCB Manufacturing
Although the effects of the COVID-19 pandemic are lessening, the virus still has a grip on many parts of the world. One of these areas is in China, where the government will lock down locations showing a spike in infections. Unfortunately, many of the cities that have been locked down as a precaution are key providers of electronic assemblies for smartphones and other devices. These lockdowns have also had an impact on printed circuit board production. Some of these production facilities have developed methods of working around the lockdowns with closed-loop systems to protect their employees. However, there is still a problem with shipping. Truckers in these locked-down areas must go through an intensive screening process which adds delays and further contributes to the overall problem.
OEMs must compose early product plans to avoid future electronic parts shortages and combat these problems. This kind of planning requires working with a procurement team that is aware of the constantly changing roadmap of the semiconductor industry as chip builders prune older parts from their catalogs. For instance, Samsung has announced that they will stop taking orders for DDR3 memory modules by the end of 2022 due to the greater popularity of their DDR4 and DDR5 products. Although the demand for these older memory modules is decreasing, the makers of legacy electronics that rely on them could be caught off-guard if they haven’t planned for the obsolescence of these parts. Here is where the skills of an experienced PCB contract manufacturer can help an OEM dodge the proverbial bullet of PCB component shortages.
Ways Your PCB Contract Manufacturer Can Help
A quality circuit board contract manufacturer typically has several capabilities to help an OEM through the current electronic part shortage and many other challenges. For example, here are three highlights that a PCB CM will use to help you:
- Procurement process: In addition to staffing experienced purchasing agents, the CMs procurement department will have the tools necessary to find the best parts at the best prices for your project. They will also monitor those parts for future life-cycle changes and alert you to potential concerns.
- Engineering team: The PCB CM’s engineering department will review your design for manufacturability and flag any concerns with the parts you have chosen to use. They can give you recommendations on alternative parts or circuitry to avoid part shortages that will derail your production schedule.
- Multiple manufacturing facilities: The CM can schedule your project for the most efficient manufacturing strategy with multiple production locations.
At VSE, we are a U.S.-based manufacturer with locations in the San Francisco Bay Area and Reno, Nevada, to provide the best service to our customers. Being a local manufacturer, we understand our customer’s business needs and work directly with them to navigate the parts shortage and deliver the highest quality products.