In a January 2022 interview, U.S. Commerce Secretary Gina Raimondo reported that a third of the recent increase in inflation is due to escalating car prices. She went on to say that last year saw a significant reduction in the production of new vehicles resulting in lower supplies and prices increasing as much as 20%. This upset in the automobile industry is due to the lack of semiconductors needed for new car production. It’s a simple case of supply and demand; to lower the prices of new cars, automobile manufacturers need to increase production. And increased production requires a healthy supply of electronic components.
However, the automobile industry is not the only victim of the component supply chain shortage. Medical devices, home electronics, and industrial equipment are all affected by the same lack of electronic components. Successfully navigating the semiconductor chip supply chain shortage requires a different set of skills than what PCB design groups have traditionally had to wield. Here are some ideas that your design group may want to consider to work around these supply chain difficulties.
Exploring the Electronic Component Supply Chain Problem in Detail
Some sources have reported that the demand for semiconductors has increased 17% over the last two years, yet the supply of these chips has not grown to meet the demand. The commerce department has reported that most semiconductor foundries are currently producing at 90% of their capacity. With these high production levels, chipmakers have minimal capacity to increase their production, yet the need for semiconductors is only projected to grow. New technologies under development, such as electric vehicles, 5G, and other innovations, will only continue this escalating need for new semiconductors.
The commerce department is taking these issues very seriously and is investigating inventories, production capacities, and backlogs in the semiconductor manufacturing industry. They have discovered that the average on-hand inventory for OEMs has slipped from 40 days of supply to less than five. This investigation has further revealed that semiconductor prices from some sources are unusually high, which the commerce department has promised to look into more.
To help, lawmakers have been working on legislation to provide money for the semiconductor industry. Meanwhile, many companies are taking extreme measures like searching worldwide for specific chips to resolve their supply chain problems. The key to the electronic component supply chain problem is to get more semiconductor manufacturing facilities up and running. However, bringing new foundries online takes time and money, and engineering groups still need to get their designs built in the short term. Next, we’ll look at how the supply chain problems may directly affect a PCB design and what can be done about it.
How the Chip Supply Chain Shortage Affects PCB Design
The semiconductor shortage may cause some of the components needed for a PCB design to be unavailable. Not only will this affect newer parts, but some of the legacy parts may be affected. Capacitors, resistors, and other common parts are also in short supply. To protect the long term buildability of designs, here are some important considerations:
Greater attention to component availability and prices is now essential
It used to be that engineers could simply rely on the parts they needed being readily available, but that is no longer the case due to supply chain shortages. Designers need to check on part availability and prices before committing to using them in their designs. This way, expensive and time-consuming redesigns of the circuit board to implement part changes can be avoided.
Be prepared to use alternatives in your design
Part shortages will also compel designers to consider alternatives, which can be done in three different ways:
- Circuitry redesign: Redesigning the circuitry of the printed circuit board may allow for the elimination of at-risk parts from the design.
- Alternative components: In some cases, other types of parts or combinations of parts can be used to replace an at-risk component.
- Multiple part footprints: Another option is to use a combination PCB footprint to allow the contract manufacturer to choose between different parts as long as they are functionally equivalent.
Stay watchful for counterfeit parts
PCB design groups also need to monitor who they are sourcing their parts from. Counterfeiters of electronic components have plagued the industry for a long time and are now increasing their efforts to take advantage of the chip supply chain shortage. This scam includes outdated parts stamped with newer dates, part numbers altered on general components to represent higher-precision parts, and bogus parts.
To stay ahead of the chip supply chain shortage problems, PCB design groups have to become experts in the art of procuring electronic components. Fortunately, your design group can turn to some experts in this field for help.
Finding the Help You Need to Navigate the Supply Chain
PCB contract manufacturers have been navigating the complex component supply chain for a long time before the COVID-19 pandemic. They already have regular manufacturers, distributors, and brokers. The PCB CM procurement teams will also have software tools specifically designed for part research and get reports from vendors on component status changes. These tools give the PCB CM forward visibility to project potential changes to parts availability, lead times, and prices.
At VSE, our procurement team has years of experience working with the component supply chain to find the best parts at the best prices for our customers. Our component engineers will also recommend circuitry alterations and part changes for your design to shift away from using at-risk parts to avoid manufacturing delays. Additionally, we also can monitor the parts of your legacy designs for status changes so you can be prepared ahead of time for any potential redesigns.
