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Electronic Components

Case Study – A Switch to Efficiency and Cost-Effectiveness

Case Study – A switch to Efficiency and Cost-Effectiveness

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The Customer

A long-standing USA-based commercial vehicle manufacturer, renowned for their custom-engineered trucks, with a history extending over 120 years.

The Problem: Navigating Increasing Costs and Supply Reliability

The customer was burdened by the frequent price hikes of their original Honeywell switch. These increases were occurring three times annually, posing a serious financial strain.

Faced with the unsustainable costs of the Honeywell switch, the customer needed an alternative that would not only be cost-effective but also ensure consistent quality and supply reliability. They required a switch that could seamlessly integrate without disrupting their manufacturing processes.

The Solution: Lantek's Tailored Sourcing Strategy

The engagement began through a trusted connection. The buyer at the customer’s end, having worked with Senior Account Manager Shannon Mitchell from Lantek in various capacities across different organizations, reached out, confident in Lantek’s ability to provide a viable solution.

Shannon, utilizing her extensive experience and understanding of the industry, leveraged the specifications of the existing Honeywell switch to cross-reference and identify a suitable alternative.

Shannon identified a Nason switch as the best alternative, ensuring this process involved meticulous matching of PSI, size, and other critical specifications to ensure compatibility and functionality.

The Outcome: Enhanced Operational Efficiency and Cost Savings

The alternative Nason switch sourced by Lantek not only matched the original Honeywell switch in terms of fit, form, and function but also brought a more stable and predictable pricing structure. This was evidenced by only one price increase since the start of the business relationship with Nason, in contrast to the thrice-yearly increases of the Honeywell switch.

Beyond the immediate cost savings and stability in pricing, the new switch also provided the customer with increased supply reliability. Lantek’s ability to hold stock for up to 12 months ensured that the customer had a consistent supply of the necessary components, buffering them against market fluctuations and supply chain uncertainties.

The customer expressed high satisfaction with both the quality of service and the performance of the alternative switch. Lantek’s solution was acknowledged as instrumental in addressing their primary concerns of cost and supply reliability.

Conclusion: Lantek’s Role as a Strategic Sourcing Partner

By providing a cost-effective, reliable alternative to the Honeywell switch, Lantek not only aided the customer in maintaining their production efficiency but also fortified a relationship built on trust and satisfaction.

This case study serves as a testament to Lantek’s expertise in sourcing and supplying high-quality components, tailored to the specific needs of our customers. Our approach – focusing on understanding the client’s problem, strategic sourcing, and delivering customized solutions – positions us as a trusted and reliable partner in the industry, capable of tackling a variety of challenges with efficiency and effectiveness.

Lantek’s ability to provide second-source alternatives, replacements for obsolete components, and significant cost savings showcases our expertise in addressing similar challenges faced by other businesses.

For businesses seeking reliable second-source alternatives and aiming to control costs, Lantek recommends our scheduled ordering service. This service ensures fixed pricing and stock availability for up to 12 months, protecting against price increases and availability issues.

If you are facing similar challenges in your operations or seeking reliable, cost-effective sourcing solutions, get in touch today on +1 973-579-8100 or email sales@lantekcorp.com. Our team is dedicated to providing you with customized solutions that meet your unique requirements.

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Electronic Components

Chips Act – Latest updates

CHIPS Act Update: New Developments and Their Potential Impact

The CHIPS and Science Act of 2022, a significant investment in US semiconductor manufacturing, continues to evolve.

During a Center for Strategic & International Studies event in February, Secretary of Commerce Gina Raimondo gave several updates on the CHIPS Act. Here’s a quick breakdown:

Funding Expectations: While the CHIPS Act allocated $52.7 billion for semiconductor manufacturing incentives, Secretary Raimondo stated in February that companies might receive less than initially requested. This emphasis on “doing more for less” aims to support a wider range of projects within the allocated budget.

Ambitious Goals: The Biden administration’s bold target was also revealed in the February update: the US aim to produce 20% of the world’s most advanced chips by 2030.

Focus on Fabs: Secretary Raimondo emphasized establishing at least two new large-scale clusters for “leading-edge logic chips” by 2030. These fabs are vital for producing the most advanced semiconductors used in various electronic devices.

The Impact: The increased domestic production of chips is expected to:

  • Reduce supply chain disruptions: This could lead to more stable product availability and potentially shorter lead times for sourcing electronic components.
  • Price fluctuations: While the long-term impact on pricing is uncertain, increased domestic production might eventually stabilize chip prices, currently subject to global market fluctuations.
  • Emerging opportunities: The CHIPS Act could foster innovation and development within the US semiconductor industry, potentially leading to the emergence of new domestic chip manufacturers and suppliers.


AI Chip Development and the CHIPS Act

The US hopes to increase its lead in the development of AI chips, and the Act’s provisions include funding for research and development efforts. This could lead to the creation of more efficient and powerful AI chips, ultimately benefiting various industries like healthcare, automotive, and consumer electronics that rely heavily on AI technology.

While the specific details of AI chip development within the CHIPS Act are still unfolding, it’s an area worth monitoring as it holds significant potential for future innovation and economic growth.

Your Partner in an Evolving Electronic Component Industry

As the landscape of the electronic component industry continues to evolve, Lantek stands at the forefront as a trusted and reliable partner, ready to meet all your needs.

We understand the challenges you may face when supply chain disruptions occur, or when your current suppliers cannot meet your specific needs. That is why we are here to help. Our aim is to go beyond being a mere distributor; we aspire to be your long-term partner, dedicated to assisting you with anything you need, whenever you need it.

Lantek is uniquely positioned to not only assist with sourcing hard-to-find electronic components but also specializes in cross-referencing for obsolete parts, securing better pricing, or identifying alternative sources. We offer comprehensive solutions including scheduled orders, ensuring you have the components you need when you need them, and any other support services tailored to your specific requirements.

Contact us today and let us help you navigate the complexities of the electronic component market.

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Electronic Components Supply Chain

Preparing for 2024 DRAM and NAND Flash Pricing Challenges and Potential Shortages

Preparing for 2024 DRAM and NAND Flash Pricing Challenges and Potential Shortages

DRAM and NAND Flash Shortages


Lately, the memory market has seen considerable volatility, affecting the contract prices of both DRAM and NAND Flash.

Speculation about a possible shortage in the latter half of 2024 is driven by information indicating that top manufacturers, such as Samsung, Micron, and SK Hynix, have reduced their production outputs to increase the DRAM and NAND Flash prices. This has raised concerns about the availability and price stability of these components.

Understanding the Emerging DRAM Shortage

The semiconductor industry is currently abuzz with speculation regarding a potential DRAM shortage. According to TrendForce, DRAM contract prices are estimated to increase by approximately 13-18% in the first quarter of 2024.

The potential shortage can be traced back to a series of market adjustments following an oversupply and subsequent price decline in 2023. In response to these market dynamics, DRAM manufacturers adjusted their output, which, coupled with a resurgence in demand — especially for high-bandwidth memory (HBM) chips used in AI and server applications — may lead to supply constraints.

There is also speculation among industry experts that these production cuts may partly serve to artificially sustain high DRAM prices, thereby safeguarding manufacturers’ profitability following a period of reduced margins.

NAND Flash Contract Prices on the Rise

Following a similar pattern to DRAM, NAND Flash contract prices are also on the rise. NAND Flash contract prices are projected to see a 15-20% rise in the first quarter of 2024, echoing a trend similar to DRAM.

This increase is primarily driven by manufacturers raising prices aggressively to recoup losses from the previous year, amidst market outlook uncertainties. A significant factor influencing future price adjustments is the demand for enterprise SSDs, with procurement activities expected to push enterprise SSD contract prices up by 18-23%.

Additionally, eMMC and UFS products are facing substantial price hikes due to production cuts, leading to increased contract prices in the range of 18-23%, driven by the need to avoid shortages amid stable smartphone and Chromebook demand.

NAND Flash wafer contract prices are anticipated to experience a more moderate increase of about 8-13%, as manufacturers aim to enhance profits through price adjustments.

Implications for Procurement Strategies

The speculative nature of the current DRAM and NAND market situation, characterized by a lack of concrete data on production capacities and demand forecasts, presents a complex challenge for purchasing professionals.

The potential shortage raises concerns about increased costs and limited availability of essential components for products ranging from personal computers to servers and smartphones. It is imperative for procurement departments to closely monitor these developments, as they may significantly affect sourcing strategies and cost structures.

Strategic Recommendations for Purchasing Professionals

Scheduled Ordering

In response to the unpredictable fluctuations in DRAM and NAND Flash contract prices, purchasing professionals should consider adopting a scheduled ordering strategy.

Lantek Corporation’ scheduled ordering service helps mitigate the risks of price volatility and availability concerns. It allows customers to secure their annual requirements upfront and store them in a Lantek warehouse, drawing on this inventory only as needed.

This strategy offers the dual benefits of price stability and flexible inventory management without the initial financial outlay. Components can be paid for as they are deployed, ensuring a cost-effective approach to managing supply chain risks and maintaining cash flow efficiency.

Market Monitoring

Vigilant observation of DRAM price trends, production volumes, and manufacturer announcements is crucial for timely and informed decision-making.

Transparency and Communication

Engaging with suppliers to gain clearer insights into their plans and capacity allocations can help in anticipating supply challenges.

Diversification

Exploring alternative memory technologies and suppliers can mitigate risks associated with supply bottlenecks and ensure continuity in component sourcing.

Inventory Management

Consider strategic stockpiling of DRAM components in anticipation of potential shortages, balancing the costs of inventory holding against the risks of supply disruptions.

Contract Negotiation

Long-term contracts with suppliers, incorporating flexible terms around volume and pricing adjustments, may provide a buffer against market volatility.

Navigating Uncertainty with Strategic Foresight

The semiconductor industry is characterized by cyclical patterns, and the current landscape of rising contract prices for both DRAM and NAND Flash reflects this trend.

In the face of these challenges and uncertainties, Lantek Corporation stands as a beacon of reliability and assurance for purchasing professionals. Our expertise as a global distributor specializing in shortage, hard to find, and obsolete electronic components positions us uniquely to support your procurement strategies amidst the potential DRAM and NAND Flash shortages.

By leveraging our extensive network and deep market insights, we ensure the timely delivery of high-quality components, mitigating the risks associated with market volatility. Our scheduled ordering services offer a strategic advantage, allowing you to lock in prices and spread deliveries throughout the year, ensuring both cost-effectiveness and supply chain stability.

Trust Lantek Corporation to navigate you through the complexities of the current market trends with strategic foresight and unparalleled reliability. Get in touch today on 1-973-579-8100 or email sales@lantekcorp.com to discuss how we can support your electronic component procurement strategy.

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Electronic Components

Celebrating 30 Years of Growth and Collaboration at Lantek Corporation 

Celebrating 30 Years of Growth and Collaboration at Lantek Corporation

Lantek Corporation headquarters

As the clock struck midnight on New Year’s Eve, we didn’t just welcome a new year at Lantek Corporation; we embarked on a journey celebrating our 30th anniversary.

Three decades ago, Lantek began with a vision to become the unparalleled leader in independent electronic component distribution. We envisioned a world where electronic are never a bottleneck to progress, innovation, and business operations. Today, we stand proud as a trusted partner in sourcing hard-to-find, allocation, and obsolete electronic components.

From Humble Beginnings to a Thriving Business

Lantek Corporation journey began in 1994 in Sparta, New Jersey, starting as a modest enterprise and quickly evolving into a significant business. Our growth was driven by a relentless spirit of dedication to exceptional customer service.

This growth led to moving to a larger facility in Lake Hopatcong in 2006, and then back to Sparta in 2014 to accommodate the expanding SemiXS, our excess electronic component stock buying division. At this location, Lantek introduced scheduled ordering, transforming customer partnerships by forecasting and managing their electronic component needs, enhancing efficiency, and reducing lead times.

With this success came the need for further expansion. The SemiXS division, fueled by the efficiency of scheduled ordering, required its own dedicated space to flourish. In response, we embarked on the exciting project of building a custom-designed warehouse. Last year, Lantek moved to its new office and warehouse facilities. This purpose-built facility solidified our commitment to providing not just quality electronic components, but also optimized operational systems to best serve our clients.

Expanding Our Horizons: Box Builds and Beyond

Today, Lantek is not merely adapting, we are evolving. Embracing new opportunities, we have ventured into the realm of box build assemblies. This comprehensive service goes beyond supplying components, offering fully assembled and tested electronic solutions for our customers’ diverse needs. The convenience and efficiency of box builds are a testament to our commitment to versatility and exceeding customer expectations.

A Bright Future of Partnerships and Collaboration

As we celebrate 30 years of success, we look to the future with excitement. Driven by our commitment to creating long-lasting partnerships with our customers, we stand poised to explore new frontiers and embrace emerging technologies. Whether it’s pioneering sustainable practices or forging strategic collaborations, we are dedicated to shaping the future of our industry.

Join us on this journey as we continue to unfold our legacy of excellence. We extend our deepest gratitude to our loyal customers, dedicated employees, and supportive partners who have been the cornerstone of our success.

Here’s to 30 years of relentless collaboration, growth, and a future brimming with boundless possibilities!

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Electronic Components Supply Chain

Greener Gears: Michigan’s Clean Energy Push

Greener Gears: Michigan's Clean Energy Push and Lantek's Solutions for a Sustainable Automotive Future

Automotive manufacturing

In a landmark move for the heartland of American manufacturing, Michigan Governor Gretchen Whitmer has signed into law a package targeting 100% clean energy by 2040. This ambitious green revolution extends beyond clean streets and air – it sets the stage for a transformed automotive industry.

As a leading global distributor of electronic components, at Lantek Corporation we are keenly aware of the opportunities and challenges this presents for our automotive customers in Michigan and around the world. We understand the need to adapt, innovate, and embrace sustainable solutions to meet the demands of this green future.

Shifting Gears: The Roadmap to a Sustainable Automotive Landscape

The path to clean energy in the automotive industry starts with electrification. With the shift in electric vehicle manufacturing, spearheaded by giants like Michigan-based automaker General Motors planning to phase out all gasoline and diesel-powered vehicles worldwide by 2035, the demand for advanced electronic components that power electric vehicles will skyrocket.

However, securing these critical resources amid ongoing global supply chain constraints can present significant challenges for purchasing professionals.

Lantek Corporation – Your Partner in the Green Automotive Revolution

Lantek recognizes these complexities and stands as a robust and reliable partner for automotive enterprises navigating this dynamic terrain. Our unparalleled expertise enables us to address the core concerns of procurement teams.

Global Sourcing Network: Leveraging our extensive network of established relationships with vetted suppliers around the globe, we source even the most elusive components, ensuring uninterrupted production schedules.

Strategic Inventory on In-Stock Electronic Components: We maintain a strategically optimized buffer of over 1 billion electronic parts, mitigating the impact of volatile supply chain fluctuations and guaranteeing operational continuity.

Allocation Optimization: Our team of seasoned procurement specialists possesses a deep understanding of allocation nuances, allowing us to secure vital components and granting your organization a distinct competitive edge.

Comprehensive Solutions: Lantek serves as your one-stop partner for a diverse array of electronic components, eliminating the need to engage with multiple vendors and reducing administrative burdens.

Quality and Delivery Excellence: We employ sophisticated component testing procedures and measures to protect the authenticity and reliability of every component, safeguarding your production lines and brand reputation. We prioritize timely deliveries through our robust logistics network, ensuring components arrive on time and ready for immediate deployment.

Collaborative Partnerships: We foster close relationships with our customers, diligently analyzing their unique needs and challenges. This collaborative approach allows us to proactively identify alternative solutions and optimize component selection for cost, performance, and future scalability.

Lantek transcends the role of a mere supplier; we are your strategic partner, empowering your organization to seamlessly navigate the evolving electrification landscape across the globe.

Let’s shift gears together and conquer the road to a sustainable automotive future. Contact Lantek today to discuss how we can help your automotive business thrive in the clean energy era.

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Electronic Components

Global Semiconductor Sales Increase in Q2 2023

Global Semiconductor Sales Increase 4.7% in Q2 2023

According to The Semiconductor Industry Association, the worldwide sales of semiconductors reached $14.5 billion in the second quarter of 2023. This means it is an increase of 4.7% in comparison to the first quarter of the year, however it is 17.3% less when compared to the same quarter of the previous year.

Global semiconductor forecast

The Semiconductor Industry Association President and CEO, John Neuffer, remained optimistic in his current analysis of the market. He claims that even though semiconductor sales are down in comparison to the previous year, revenue is up for the fourth consecutive month – providing some reassurance that the market may continue on this trajectory for the rest of the year. 

As mentioned in our previous blog on the global semiconductor sales increase in April , the WSTS (World Semiconductor Trade Statistics) published its most recent forecast in May. In this forecast it was predicted that there would be a downturn of 10.3% in 2023, followed by a robust recovery as they estimate a growth percentage of 11.8% for 2024.

Will there be another chip shortage?

The chip shortage may have lessened recently, but the slow transition to more advanced chips is causing others to be stockpiled while others are still in short supply.

One of the industry’s that was impacted the most by the chip shortage was the automotive industry, which was dealt a significant blow by the COVID-19 pandemic. It is estimated that more than 9 million units of light-vehicle production was lost because of the semiconductor shortage. Fast forward to quarter one and two of 2023 and the same losses related to semiconductor shortages decreased to around 524,000 global units. So, although the supply shortages remain there, they are easing off over time and availability has become much more predictable, allowing automotive manufacturers to plan ahead.

Although the chip shortage seems to have eased off back to pre-pandemic levels, some predict we may face another shortage on the horizon. Geopolitical tensions between Russia and Ukraine may have an impact, as well as the unpredictability of natural disasters which has the potential to prevent manufacturing. Then there is the other influencing factors, such as AI and new technology which seems to be progressing at a unpredictable rate – so there is always the uncertainty of how this will impact demand.

Planning ahead

With the uncertainty of global events and other influencing factors, it can be difficult to plan ahead for these circumstances that directly affect supply chains and demand.

At Lantek, we are here to make sure you are as organised as possible in such events. Whether you’re looking for everyday components or obsolete electronic parts, we are here to support you every step of the way.

Our Scheduled Ordering Service allows you take more control of your production line, whilst saving money in the process. We give you the convenience of placing one large order, up to twelve months in advance. This gives you the added benefits of price breaks, lower unit costs that are fixed for a year and the additional piece of mind of knowing that your stock is held in a dedicated facility allocated only for your use.

Contact us on 1-973-579-8100 or email us at sales@lantekcorp.com and see how we can help you with your component requirements.

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Electronic Components

Organic Electronics – Latest Innovations

Organic Electronics - Latest Innovations

One of the largest trends driving electronic component innovation currently is the area of organic electronics.

Organic materials, specifically the conductive and semi-conductive ones, could be a great investment while minerals like silicon are in short supply. 

Since the concept of conductive polymers has only been around since the late 70s, there has been a rush of innovation in the years since. 

One of the most famous and well-integrated forms of organic electronics is the OLED. Organic Light-Emitting Diode technology is used in TV and device screens, giving a thinner and lighter alternative to LCD (liquid crystal display) technology. 

Although OLED is potentially the most well-known, there are lots of exciting projects currently underway. Here is a quick list of some to watch out for: 

Moisture sensor for wound care

Starting off with some medical industry innovation, new adaptive moisture sensors for wounds could vastly improve the healing of some injuries. 

Currently to check the healing progress of a wound you remove the dressing, which disturbs the wound and healing process. Not the best strategy, right?  

Another factor that massively affects the healing process is the amount of moisture in the wound. Either too much or too little moisture can affect the wound negatively, so this needs to be carefully monitored.  

The first type of moisture sensor for bandages was introduced in 2007, and since then bandages with more absorption and retention properties have been developed. 

One of the latest iterations of these bandages was proposed by the University of Bologna, Italy, in 2021. The bandage comprised of a moisture impedance sensor based on PEDOT:PSS (poly(3,4-ethylenedioxythiophene) polystyrene sulfonate) in a bandage. This version is completely wireless and can be passively monitored, unlike its heavy predecessors, including 2016’s ‘Wound Sense’. The previous iteration included electrodes and a connected reader. 

Electronic paper

Ever wondered about the tech that is in your e-reader? Electronic paper is another great organic electronics development. But electronic paper’s capabilities stretch far beyond just e-readers. It can be used for restaurant menus, advertising billboards and shop price tags. 

Capsules of polar-charged black and white ink pigments make up these screens with electrodes on both sides. When a charge is applied, the pigments with the corresponding charge will move to the bottom or top. This forms the words we see on the screen.  

This technology uses very low power since it is bistable, so it will only consume power while the screen changes.  

Triboelectric nanogenerators

These devices, also called TENGs, can convert mechanical energy into electricity. Since most of the components are organic it is a much more eco-friendly and safe option for a lot of wearable technology. It could harvest energy from everyday sources, like human motion, flowing water, and many other areas. 

Smart windows

These innovative successors to the solar panel could see transparent solar cells placed on top of windows. It could generate electricity and improve heating and cooling costs through harnessing UV light. 

Typically transparent solar cells absorb infrared light, but the latest iterations use UV instead. Currently, UV light is reflected by a window coating so it doesn’t affect our skin or bleach the items in our house. However, with transparent solar cells this energy can be utilized to power the window and will not interfere with heat coming into the room by absorbing the infrared rays. 

The technology is low current and wireless, and could be used to power other IoT (Internet of Things) devices in the future. 

Here today, gone tomorrow

It is nice to look to the future and see all the exciting innovations to come, but that won’t solve your electronic component shortages today. Lantek can help. With our vast stocklist and global contacts we can source any part you need. Contact us today at sales@lantekcorp.com, or call us on 1-973-579-8100. 

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Electronic Components

Happy Independence Day from Lantek

Happy Independence Day from Lantek

In the United States, the 4th of July is a very special day. 
 

It is the day we commemorate the signing of the Declaration of Independence in 1776, the document that created the United States of America.  

 

The date has been a federal holiday since 1941, which means we here in the US are lucky enough to get a day off! 

 

Independence Day means a lot to us here at Lantek. As an independent global electronic component distributor, independence comes with the territory. Our independence has helped us better serve our customers since the company was founded.  

 

Working with Lantek helps keep you independent too. With our all-encompassing service, you are not relying on multiple companies to fill your requirements.  

 

Many of the values in the Declaration of Independence are reflected in our company’s core values: 

Determination 

Making sure to always go the extra mile to meet your requirements. Whether it is stocking, sourcing or selling, Lantek is here to help. 

Faith 

We can give you assurance that when you buy with Lantek, you are choosing a reliable source with years of experience in sourcing. 

Loyalty 

Your dedicated Account Manager who will be your point of contact for everything that you need, with no unwanted communications. 

Trust 

Our industry-leading quality and component inspection gives you the reassurance that your supply chain is protected with Lantek. 

 

 

Although we are off celebrating Independence Day today, we will be back tomorrow to fill all your electronic component requirements. Email us now at sales@lantekcorp.com and we will get back to you.  

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Electronic Components

Global semiconductor sales increase in April

Global semiconductor sales increase in April

Global semiconductor industry sales were $40bn during April 2023, according to the Semiconductor Industry Association. This is an increase of 0.3% from March’s $39.8bn, but 21.6% less than April last year, which was $50.9bn.

The global semiconductor forecast

SIA President and CEO John Neuffer said the market remained in a cyclical downturn, but hoped the slight month-to-month increase heralded the coming of better times ahead.

The World Semiconductor Trade Statistics (WSTS) organization released a spring 2023 global semiconductor forecast, which was endorsed by the SIA. The forecast predicted the annual global sales would be $515.1bn this year. This is down from the $574.1bn achieved in 2022, but the WSTS predicted the market would achieve its highest-ever total at $576.0bn in 2024.

Legacy chip demand

Despite the chip shortage lessening, the new challenge facing the industry is scaling up to the new level of demand. The step-up from the older legacy technology often used in consumer goods to newer, more advanced tech is taking time. And currently, this is causing stockpiles of certain chips while others are scarce.

This is one of the reasons why shortages are persisting in some areas of the industry, while other areas have mostly recovered.

Electronic component supply and demand

Worldwide chip production in general is increasing, alongside investments in new equipment and plants. But there still seems to be inventory for certain products that isn’t decreasing. The automotive and EV market is still seeing persistent shortages. Certain automotive companies are struggling with legacy chip availability, while EV makers are trying to stock new tech iterations.

Some predict there will be another chip shortage, despite the introduction of the CHIPS Act. Influencing areas of development, including AI, IoT and 5G will affect demand, but the uncertainty is to what extent it will be affected. Another uncertainty is the likelihood of geopolitical events or natural disasters, which cannot be predicted. This may shut factories or affect transportation, and change the semiconductor output overnight.

Continuing demand

We’re all aware that there are shortages of both everyday components and obsolete electronic parts. Lantek is the perfect partner in times like these, so get in touch today. We’ll be there every step of the way, from your first inquiry until your order is fulfilled. Call us on 1-973-579-8100 or email us at sales@lantekcorp.com

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Electronic Components

New CHIPS Act guardrails proposed

New CHIPS Act guardrails proposed

The US Semiconductor Industry Association (SIA) has asked Commerce for more flexibility for recipients with facilities in “foreign
countries of concern” in the CHIPS Act.

The SIA published comments on 22 May, asking for a revision on a Proposed Rule of the CHIPS Act, which they say would “unduly restrict
ordinary business activities”. They also believe the Rule is much more restrictive than the goals originally set by Congress.

These “guardrails” are being introduced to prevent the improper use of CHIPS Act funding.

Funding limitations

The Act sets out that any recipients of funding are limited to how much they can invest in “foreign countries of concern”. Existing legacy
manufacturing facilities or equipment were made exempt from these regulations. The Act also states any “significant renovation” to these facilities going forward means they no longer qualify.

The SIA’s comments express concern over the new Proposed Rule’s definition of a significant renovation. Unlike the original rules put
forward, it says, the revised definition could hamper the maintenance and running of these facilities.

One of the reasons for the Act was to ease the US’s reliance on Chinese-produced semiconductors. However, according to the SIA some of the
restrictions will hold CHIPS Act recipients back from competing against other industry players.

The SIA’s response

In the SIA’s comments it says the guardrails should allow companies to maintain the “basic competitiveness” of their facilities. As it is
now, it believes the Proposed Rule would leave companies unable to even maintain facilities.

Among other recommendations, the comments also list changes to how often capacity is measured and revisions to the definition of a legacy
semiconductor.

In a statement released alongside the comments, the SIA said it looked forward to continued engagement and partnership with the Commerce
Department.

 

In comments published separately to those on the guardrails, the SIA also published comments on the advanced manufacturing investment credit regulations proposed by the Treasury Department. Both press releases are available here.

Stay on top of the latest news

Alongside Lantek Corporation being one of the best electronic component distributors around, we also keep you up to date with the latest industry news. Check out other posts on our blog here.