Tag: Electronic components

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component shortage Electronic Components

Component Prices Rise 10% to 40% – But why?

Component Prices Rise 10% to 40% - But why?

While component price increases are expected when demand surpasses supply, the scale of recent increases has come as a shock to many businesses.

In its Q3 Commodity Intelligence Quarterly, CMarket intelligence platform Supplyframe reports that some electronic components have seen prices rise by as much as 40%, making it uneconomical for products to be made.  

Specifically, semiconductors, memory and modems are seeing 10 to 40% price increases, exceeding what most analysts envisioned for 2021.

Why are prices rising?

Price rises start with materials. There are long lead times for many raw materials, causing shortages. Add rising commodity prices and difficulties transporting products and you have a disrupted manufacturing economy.

You also must factor in the impact of the coronavirus pandemic, which has caused labor shortages and disrupted the manufacturing economy with shutdowns.

Logistics is also a big fly in the ointment for electronic components. The industry is recovering from COVID-induced shutdowns and travel restrictions are causing problems at borders, creating delays that ripple through the supply chain.

Supply and demand

The bulletproof economics of supply and demand also rule the roost for electronic components, and demand is higher than it has ever been.

We are in a situation today where most electronic components manufacturers are running at 99-100% capacity and can’t keep up with demand.

Demand is outstripping supply for chips, memory and communications components like integrated circuits, discrete circuits, optoelectronics, and sensors creating a bidding war as manufacturers scramble to get what they need.

Growing demand for new technologies

Emerging technologies like artificial intelligence, machine learning, virtual reality, augmented reality, and edge computing are fuelling demand for smarter chips and data center modernization, while technologies like 5G and Wi-Fi 6 are demanding infrastructure rollout, which requires significant investment.

Across the board, technology is booming. Manufacturers are making more products for more people, and they must do so while balancing costs at a time when component prices are rising – no easy feat even for established businesses. 

Pressure relief

Everyone is raising prices in line with their own cost increases, from semiconductor manufacturers to outsourced fabs and suppliers. At 10 to 40%, these increases are putting pressure on supply chains and businesses.

How many price increases will target markets absorb? How can we sustain production without significant margin pressure? These are the challenges facing manufacturers, who are stuck between a rock and a hard place right now.

There are a few solutions:

  • Equivalents: Source equivalent components from different brands/makers/OEMs that meet size, power, specification, and design standards.
  • Use an electronic components distributor: Distributors are the best-connected players in the industry, able to source hard-to-procure and shortage components thanks to relationships with critical decision makers.

Prices will fizzle down, eventually

Although research published by Supplyframe says pricing challenges will remain through early 2023, they won’t last forever. Price rises should fizzle out towards the end of 2021 as manufacturers catch up to orders and reduce disruption.

If you are experiencing an electronic component shortage, we can help. Email us at sales@lantekcorp.com if you have any questions or call us at 973-579-8100 to talk with our team.

 

 

 

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component shortage Electronic Components

Automotive electronics market set to grow

Automotive Electronics Market set to grow

With vehicles getting smarter, more connected and more autonomous, the automotive electronics market looks set to soar.

Future growth in numbers

Back in March, Precedence Research predicted the automotive electronics market would hit around US$ 640.56 billion by 2030.

Then, in July, Global Market Insights released research predicting the automotive electronics market would hit around US$ 380 billion by 2027.

Interestingly, measured across the same period, both research reports (which are independent) predict a similar growth pattern. Global Market Insights predicts a 6% CAGR, while Precedence Research predicts a CAGR of 7.64% over a 3-year longer period.

With two separate reports indicating significant annual growth. The automotive electronics market looks set to boom. But wait, there’s more.

A 9.3% CAGR is expected in the automotive electronics market by 2030, according to research by P&S Intelligence. They predict slightly less growth than Precedence Research to 2030, at US$ 615.3 billion (versus $640.56 billion).

Growth factors

There are approximately 1,400 chips in a typical vehicle today. Which each chip housing thousands of components on a semiconductor wafer, creating integrated circuits that power computing, memory, and a host of other tasks.

Those are just the chips.

Cars have thousands of other electronic components, including passive, active and  interconnecting electronic components. From batteries, sensors and motors, to displays and cameras. Oh, and everything is connected.

All told, a typical car today has more than 50,000 electronic components that enable features like in-car Wi-Fi, self-parking technology, adaptive headlights, semi-autonomous driving technology, keyless entry, and powered tailgates.

However, cars are getter smarter and more advanced. Electronic components today make up around a third the cost of a car, which will increase over time as more sophisticated and greater numbers of components are used.

Smarter cars need more components  

The future of cars involves electrification, autonomous and self-driving technologies, hyperconnectivity, Internet of Things, augmented reality, artificial intelligence, biometrics and a whole host of next-generation technologies.

How will these be enabled? With electronic components.

Let’s take electrification as an example. An electric car handbook will tell you an electric car has a motor, a battery, an on-board charger, and an Electronic Control Unit (ECU) that controls one or more of the electrical systems or subsystems in the vehicle. Together, these let you drive around, charge, and pop to the shops.

In-between these systems, are hundreds of thousands of electronic components that make them work. You see, an Electronic Control Unit is a single component, containing thousands of smaller components, each performing a critical role.

The automotive electronics market is set to soar because cars and other vehicles will need more components with electrification and next-gen technologies. Sometimes, things can be simple to explain, and this is one of those times.

Meeting demand

The electronics industry is facing a global chip and electronic component shortage which is expected to last 2-3 years. As demand for automotive electronics soars, shortages look very likely for certain components like CPUs and memory.

The solution for many companies will be to use an electronics component distributor, to fill gaps in the supply chain and keep things moving.

Electronic component distributors like Lantek can source hard-to-procure components because we have relationships with the best suppliers in the industry. Contact us today with your inquiries at sales@lantekcorp.com or call 1-973-579-8100

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Electronic Components passive components

Passive and Interconnecting Electronic Components market to display lucrative growth

Interconnecting components market displays lucrative growth

The passive and interconnecting electronic components market is predicted to display lucrative growth across all regions over 2020-2025, with North America the dominant market due to the prominence of players in the country.

These predictions come from The Passive and Interconnecting Electronic Components market report from Market Study Report, which you can request a sample of. The report delivers a rigorous analysis of the market, examining the main growth drivers and restraints, as well as opportunities for revenue cycles.

The passive and IEC markets are forecasted to experience a CAGR (compound annual growth rate) of 3.1% from 2020-2025, with the US market expected to reach $32.3 billion by 2025, up from $28.6 billion in 2020.

Key players in the industry include:

  • ABB
  • API Technologies
  • AVX Corporation
  • ST Microelectronics
  • 3M Electronics
  • Fujitsu Component
  • American Electronic Components
  • Hamlin
  • Eaton Corp.
  • Datronix Holding Ltd

As the world gets smarter and demand for passive and interconnecting electronic components increases, small players will also take a bigger role. Trade barriers caused by geography will need to be overcome to meet demand, fuelling an explosion in growth across all developed markets, from Europe to Asia Pacific.

What is fuelling growth?

While the report provides in-depth analysis of factors that will fuel growth, we don’t want to tread on its toes, so we’ll provide a simpler analysis.

The reason the passive and interconnecting electronic component markets are going to experience significant growth over the next several years is because of industry tailwinds and technological advancement. Given today’s technological innovation, it’s no wonder that demand for all types of electronic component is soaring.

Disruptive new technologies, rapid advancement in existing technologies and the adoption of smarter, more connected devices, is fuelling unprecedented demand for everything from passive components to chips.

For example, in 2021, manufacturing of passive components could see an 11% increase, but demand is likely to exceed 15%.

Making supply meet demand

There has been a lot of talk about how the next great technological cycle will fuel growth for the semiconductor industry, but it’s important to recognize that chips are nothing but silicon and metal without other components like passives and IECs.

While supply for some components like display drivers is ticking along, there is a global shortage for other components like active, passive and electro-mechanical components, putting manufacturers in a compromised position.

The shortage for some IECs and passive components is expected to last several years, so making supply meet demand will be a challenge in the near future.

To make supply meet demand, suppliers and manufacturers will need to partner with well-connected distributors. Electronic component distributors are the best-connected players in the supply chain, linking sellers with buyers and vice versa.

Sourcing and allocating shortage electronic components is something that we specialize in at Lantek. We help source components that are impossible to find, helping to keep supply chains moving and manufacturing plants going.

With the passive and interconnecting electronic components market set to soar, planning is essential to make supply meet demand and capitalize on growth.

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Electronic Components

What Shortage? How Electronic Component Distributors Make Supply Meet Demand

What shortage? How electronic component distributors make supply meet demand

When buyers can’t find electronic components, they turn to distributors like us who can source scarce and obsolete parts.

Our experience has been tested to new extremes over the last several months due to the semiconductor and wider electronic components shortage. This shortage was years in the making but has been amplified by COVID-19.

It says everything about the state of the electronic components supply chain when Samsung, who make their own chips, don’t have enough chips. Shortages have affected brands like Samsung, Apple, Volkswagen and Nintendo not just in terms of supply, but also prices, which have skyrocketed in 12 months.

When the chips are down, prices go up.

Distributors are busier than ever

Lantek Corporation, as well other distributors, have become more essential than ever in supply chains since the COVID-19 pandemic began.

It’s no exaggeration to say distributors like us are keeping many businesses going. We keep production lines going by sourcing scarce parts from around the world – parts that would be impossible to source without excellent connections.

We are seeing desperation from companies that have never experienced supply chain problems. We’re talking about global companies listed publicly.

The situation is so bad for some components that some companies are paying a 100% premium just to secure them. Supply and demand is driving fierce competition and bidding wars are not uncommon.

If these revelations shock you, consider this – the electronics components shortage isn’t expected to abate until late 2021 at least. By then, there should be more order to the chaos, but some industry experts expect it to persist longer.

For example, IBM has said the chip shortage could last 2 years.

A 2 year extension would extend the chip shortage to 2023 at least. This is likely to be the case for other components too, including memory, integrated circuits and display drivers. A huge number of companies will be affected.

Playing a crucial role in the supply chain

Distributors like us are able to source hard-to-procure components because we have rapport with the best suppliers in the industry. In other words, we have immense buying power, and we put this to use for our customers.

Another way we are playing a crucial role in the electronics components supply chain is the reduction of counterfeit components.

Counterfeiters are taking advantage of weakened supply chains, lapse quality control processes and inadequate reporting to flood the market with illegal components. This has affected thousands of buyers and will affect many more.

Our role in this is to deploy anti-counterfeiting technologies including a SENTRY machine, die testing and decapsulation testing to test the components we procure. This ensures the components we supply are genuine parts.

We provide industry-leading chip testing to catch counterfeit parts. We have ISO 9001:2015 certification and ESD qualified staff.

If you need to buy parts and the only way to get them is with a distributor, don’t rush in – make sure your distributor is as equally qualified as us first. If you need help, feel free to call us on 001 973-579-8100 to chat with our experts.

 

 

 

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component shortage Electronic Components

IBM says chip shortages could last two years

IBM

IBM says chip shortages could last two years

As technology has advanced, semiconductors have found their way into everything that requires computing power from coffee machines to cars. But the manufacturing output for semiconductors has not kept up with this change.

The semiconductor industry has also been hit with an industry rotation in demand that it was never prepared to deal with.

This happened at the start of the coronavirus pandemic when automotive manufacturers scaled back semiconductor orders. Lockdowns meant they weren’t making enough cars, so they scaled-down and battened the hatches.

Meanwhile, the demand for data center, computing, and home device semiconductors soared. Rather than finding themselves down on orders, semiconductor makers were all of a sudden making more semiconductors than ever before.

And then the automotive sector came roaring back.

Now, the semiconductor industry is in a state of disarray. Manufacturers are struggling to make enough chips in a situation we’ve called Chipageddon. This is compounded by the fact that silicon prices are soaring, making chips more expensive.

How long will the chip shortage last? The latest opinions don’t deliver good news – IBM says the chip shortage could last 2 years.

IBM isn’t alone

There is a serious imbalance in the semiconductor industry, and this is a problem many companies are having to contend with.

For example, Ford cancelled shifts at two car plants earlier this year and said profits could be hit by up to $2.5bn due to chip shortages. Meanwhile, Apple announced it would take a $3 billion to $4 billion hit due to the global chip shortage.

However, the most telling story of the semiconductor shortage comes from Samsung.  

Samsung is the world’s largest manufacturer of DRAM and the world’s fourth largest semiconductor manufacturer but are also experiencing shortages, to the point of having to delay the launch of the next-gen Galaxy Note until as late as 2022.

The fact that Samsung is experiencing a chip shortage when it manufactures its own chips tells us everything we need to know – the chip shortage is severe. It isn’t a small shortage at all – it’s an enormous shortage affecting everyone across the supply chain.

Unfortunately, it looks like the global semiconductor shortage will be around for a few years yet, and things could get worse before they get better.

Semiconductor woes

The semiconductor shortage is the result of a catalogue of problems going back several years. Here are some of the highlights:

Intel’s woes

Intel is the world’s leading supplier of CPUs for PCs and data centres and in 2018 they caused a chip shortage with the troubled development of 10nm chips. Intel’s mistakes have led to a shortage in CPUs for computers.

Declining DRAM prices

DRAM is a computer’s main memory. In 2019 and 2020, prices for DRAM declined, causing the biggest players – Micron, Samsung and SK Hynix – to curb their output. This led to supply constraints when the coronavirus pandemic hit.

Super cycle

The global demand for chips has hit an all-time high. Data centres, computers, cloud services, augmented reality, 5G, connected devices and connected vehicles are fuelling demand. This is great for chip sales, but the industry can’t keep up.

Tech war

The U.S. created a semiconductor shortage of its own when they levied sanctions against several Chinese companies, including SMIC and Huawei. This exasperated the chip shortage, placing strain on domestic manufacturers.

Coronavirus pandemic and cancelled orders

During the coronavirus pandemic, demand for semiconductors soared in some industries (e.g. electronics) and dropped in others (e.g. automotive). When demand came back for “down” industries, demand didn’t drop for “up” industries, leading to a shortage.

Fierce competition

We now have a situation where carmakers are battling the electronics industry for chips. There aren’t enough chips to go around and increasing manufacturing capacity is impossible without significant investment in new foundries.

Meeting demand

The electronics super cycle is not going to end anytime soon because there are so many tailwinds, including self-driving cars, VR, AR, AI, 5G and space travel. So, we cannot expect demand to drop and the chip industry to catch up with itself.

To meet demand, we need new foundries which take 12-24 months to set up. Many companies are already building new foundries, or are boosting capacity at existing plants, which is good news for the long run.

In the here and now, manufacturers can meet demand for chips by partnering with an electronics component distributor like us. We specialize in the procurement and delivery of electronic components and parts (including semiconductors) for a wide variety of industries from the world’s leading manufacturers.

The semiconductor shortage has affected the entire manufacturing supply chain but our close links in the industry mean we have better access to chips than most. No promises, but we have an excellent track record across all sectors.  

Get in touch with us to discuss your needs. We’re here to help.

Call: 001 973 579 8100

Email: sales@lantekcorp.com 

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component shortage Electronic Components Lead Time

Electronics Counterfeiters Capitalize on Component Shortages

Electronics Counterfeiters Capitalise on Component Shortages

Electronics Counterfeiters Capitalize on Component Shortages

The electronics industry is experiencing a components shortage which is bad news for everyone except counterfeiters who are seeing greater demand than ever.

The total available market for counterfeit electronic components is billions of pounds, so it makes no wonder this illegal activity is seeing rapid growth.

What is a counterfeit part?

A counterfeit part is an unauthorized copy, imitation, substitute, or modification of an original component. Counterfeit components are a misrepresentation of the real thing but can be extremely convincing they are legitimate.

Giveaways that components are counterfeits include:

  • Color variances
  • Misspellings and incorrect labeling
  • Mismatched date codes
  • Duplicate date codes and labels
  • Missing items
  • Poor packaging and quality control
  • Font variances
  • Country of origin problems
  • Signs of “resurfacing”
  • Failure in tests and performance issues
How are counterfeiters capitalising on component shortages?

Electronics counterfeiters are capitalising on component shortages by penetrating weakened supply chains, taking advantage of inadequate quality control processes and taking advantage of inadequate reporting.

Demand is exceeding supply for many electronic components, exasperating the issue. The semiconductor shortage is the current big one.

As lead times get pushed out, buyers are faced with a dilemma: should they stick with trusted suppliers and put up with delays or look for another supplier? The risk is the ‘other supplier’ being a counterfeiter or not having the necessary controls in place to ensure that shipments do not get intercepted and changed.

This dilemma is when counterfeiters strike to take advantage. The wrong decision can have significant financial and economic consequences.

Another area of focus for counterfeiters is the scarcity of parts caused by end-of-life designations. There is significant demand for end-of-life components, but they can be very hard to find. Counterfeiters pray on this weakness with illegitimate copies.

There’s also a grey market for used electronic components that are refurbished or reconditioned and sold as new. The danger with this is using components that are spent and not repaired properly. When you buy “new” the components should be exactly that. Buying used is never a good idea, unless you want used parts.

How can I protect myself from counterfeiters?

First of all, you should read our 8 Step Guide To Buying Electronic Components With Confidence and Avoiding Counterfeits.

Secondly, you should only work with electronic component suppliers who have a compliance program in place. A good benchmark is suppliers who are ERAI (Electronic Resellers Association International) members. We are ERAI members, so we are on the ERAI database and use ERAI supply chain risk mitigation solutions.

Secondly, it’s really important that you have an adequate inspection and testing processes in place to verify the components you receive. If your supplier tests components for you, what testing facilities do they use, and which services are performed?

Summing up

Electronics counterfeiters are capitalizing on component shortages by taking advantage of inadequate quality control and reporting processes and weakened supply chains.

A robust supply chain and trusted parts suppliers are the two keys to protecting your organization. If you are concerned about counterfeit components in your supply chain we’re happy to provide advice. Call us on 01904 415 415 for a chat.

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Electronic Components

What does 2021 hold for the electronic components industry?

What does 2021 hold for the electronic components industry?

The coronavirus pandemic hit the electronic components industry like a freight train, knocking supply and demand for six. Now that 2021 is upon us, economies are starting to open up with pinned hopes on vaccines. This could be a banana skin, but 2021 should be a calmer year overall. The world should get back to business.

2021 in a nutshell

The avenues shut down for raw materials and shipments of electronic components will begin to open back up in 2021. This will create a healthier supply and demand market than 2020. Some issues will remain. Component shortages are likely, and this is especially true of newer parts that are found in connected devices.

Semiconductors will lead demand

The semiconductor industry saw a significant increase in global chip demand in 2020 and this will only continue in 2021. Cyclicity driven by 5G and Wi-Fi 6 upgrades and tailwinds like edge computing, AI and AR / VR will fuel demand.

Who will benefit most? Our money is on Broadcom, Arm, Qualcomm, Intel, AMD, Nvidia and Skyworks with TSMC winning on the foundry side.

DRAM will follow the path of semis

Dynamic random access memory (DRAM) is as essential to connected technologies as semiconductors. 2020 saw a sharp increase in recovery from the first quarter, and 2021 will exhibit a similarly healthy supply and demand situation.

Who will benefit most? Samsung, Micron and SK Hynix, who are the first, second and third largest manufacturers of DRAM respectively.

Shutdowns will continue

The risk of shutdowns of component production because of the coronavirus will remain in 2021. This will create extended lead times and supply issues. Governments may be forced to shutdown factories in localised areas.

The good news is this will become less common as the year goes on. The pandemic’s impact on production will reduce over time.

Tailwinds will fuel more demand than cyclicity

When evaluating electronic component demand, cyclicity and tailwinds are often pitched against each other. In 2021, we expect tailwinds like AI, edge computing, robotics and VR / AR to fuel greater growth than cyclical upgrades.

This is a sign of the times. The world is getting more connected and smarter. Innovation will fuel tailwinds and create booming tech sectors.

Counterfeiters will grow more prolific

One of the sad realities of electronic components is counterfeit components. They are becoming more sophisticated. As manufacturers clamber to get stock in this year, they are at a high risk of being targeted by counterfeiters.

Companies should rigorously control purchase sources, conduct quality inspections and use a trusted distribution partner to combat these risks.

Looking to the future

In 2020, the electronic components industry handled the coronavirus pandemic in an efficient and calculated manner. Supply and demand issues hit the industry, but they were solved for the most part in good time.

2021 will be calmer for several reasons: 1) We now have a lived experience of the coronavirus and know how to manage shutdowns efficiently, and 2) There is an increased need for us to get back to work and get on with our lives.

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Electronic Components Environment

How Lantek help tackle environmental issues in the electronics industry

Climate chnage

How Lantek help tackle environmental issues in the electronics industry

There’s no industry as polarising as the electronics industry when it comes to the environment. This is the industry that generates 70% of all toxic waste on the planet, yet it’s also the industry that’s pioneering renewable energy to address climate change.

The best way to look at the electronics industry from an environmental point of view is as a work in progress. We know that the industry is facing several environmental challenges now and in the future. The question is, how should we respond to them?

We are a global electronic component distributor, supplying electronic components to global customers. Our position in the industry has given us a unique perspective of the environmental challenges it faces. In this article, we’ll discuss some of the challenges we are facing and how we are addressing them.

Improper component storage

One of the biggest problems in the electronics components industry is the lack of environmentally-controlled storage facilities.

The biggest danger to electronic components is humidity which has to be controlled to ensure the components do not degrade. Problems like moisture absorption and contact corrosion have to be considered in storage.

Lantek only operates environmentally-controlled storage facilities. Our facilities are designed to ISO 9001 standards. ISO 9001 is the international standard that sets out the requirements for a quality management system.

Delivery emissions

Electronic components and electronic devices are shipped via land, sea and air. Some packages find their way in transit covering several countries in a single day. This generates unavoidable emissions as a natural by-product of operating.

These emissions can be reduced or offset in a few ways. The simplest way is to always use the most efficient transit methods and logistics firms that offset their emissions. This means the sender doesn’t have to offset their own emissions.

We go with this method because it allows us to meet our environmental obligations while also ensuring a high-quality delivery service.

Electronic waste (e-waste)

Electronic waste is the biggest issue facing the electronics industry. Only around 20% of e-waste is recycled each year. The rest enters landfill. It accounts for 70% of all toxic waste on the planet, which is an astonishing figure.

Lantek is helping to reduce the amount of electronic waste that enters landfill by putting components that would otherwise enter landfill back into use.

You’d be surprised by the number of components we save that are new old stock. We save hundreds of thousands of components each year. Many of these are rare legacy electronic components that are no longer being made.

Looking ahead

The electronics industry gave you the smartphone in your hand and the internet that connects you to this article. There’s no denying it’s an immeasurably valuable industry and our future will have more technology. That’s a certainty.

As civilisation becomes more reliant on technology, we will develop technologies that address the industry’s biggest environmental challenges. In particular, we hope to see a significant reduction in e-waste and emissions soon. For now, the future is what we make of it, and we’re optimistic about what the future holds.

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Electronic Components

The Benefits of Electronic Component testing

Benefits to electronic component testing

The Benefits of Electronic Component testing

Electronic component testing is an essential stage in your supply chain to ensure that the components you purchase are genuine and perform as expected. Without testing, you could end up with any old components.

Testing will safeguard you from counterfeit goods, prevent costly recalls, and help assure your manufacturing capability.

We provide electronic component testing as part of our service, inspecting and testing components upon delivery to us and prior to shipment to you. We do this for a few reasons, which we’ll take a closer look at below.

Testing prevents counterfeit components from entering your supply chain

One of the biggest challenges the electronic components industry faces is the increasing number of sophisticated counterfeiters. These counterfeiters build factories faster than they can be shut down, creating a problem that gets bigger over time.

As an electronic component distributor, we source components for our customers. This means we are at a high risk of counterfeits. There are several ways we mitigate this risk, and the number #1 way is with electronic component testing.

Component testing takes place within our own warehouses. We only use ESD-qualified personnel and procedures set out by ISO9001:2015. We also use a variety of procedures, including IC testing using a sentry machine which tests the electrical signature (PinPrint) of components to ensure they are genuine.

Testing ensures that the components you receive function as intended

One of the great things about modern manufacturing techniques is the quality of components is consistently high. Sure, you get bad batches now and again that lead to recalls, but by and large the components from top OEMs are consistently good. This is why we like to source components from leading manufacturers.

Of course, some components will be duds. Testing helps to catch these duds, so they don’t enter your supply chain. This is critically important if you don’t conduct your own testing, so that product recalls as a result of dodgy components don’t happen.

Testing is a key part of circuit design and this is especially true of PCBs and integrated circuits. Not all components need to be tested, but those that are prone to interference and damage from external elements should be tested.

Testing saves you from costly product recalls as a result of bad components

Leading on from our points about testing with regards to product recalls and counterfeit components, it is a fact that bad components (be them malfunctioning or counterfeits) are bad for business. They will cost you money.

At Lantek, we specialise in testing electronic components to ensure they are genuine and function as intended. We conduct these tests as part of our service, acting as a component distribution partner to other businesses.  

Our ties with leading OEMs and distributors means we can source electronic components from all over the world, including end of life and rare components. The quality of our work and our network means we can offer a 1-year quality guarantee. This is a guarantee that we will replace components that fail manufacturer standards.

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Electronic Components

How to deal with electronic component obsolescence

How to deal with electronic component obsolescence

How to deal with electronic component obsolescence

With technologies advancing at such a rapid rate, the rate of electronic component obsolescence is as high as it has ever been. OEMs have their work cut out to keep up with an industry where demand for electronic components is under increasing pressure as a result of innovation across the entire electronics industry.

Understanding the risks of obsolescence

Component obsolescence is bound to happen in time because all components have a diminishing lifespan. All components become obsolete eventually.

However, the rate of component obsolescence is increasing over time. This means the challenges facing you are growing.

Dealing with electronic component obsolescence

Now that you know obsolescence is nailed-on given a large enough timeframe, how can you deal with the challenge when you face it? Here’s some tips:

  1. Understand why obsolescence happens

The three main reasons for electronic component obsolescence include short product life cycles, innovation and increased demand.

A combination of these creates the perfect storm. A great example of this storm is with semiconductors, which are advancing at a rapid rate.

Which reasons for obsolescence will affect you the most? By understanding this, you can prepare properly for the future.

  1. If you are designing a product, look into longevity

The best defence against obsolescence is designing products that use components that are not expected to become obsolete during your product’s lifecycle.

You can assure longevity in a few ways:

  • Review the ‘Production Status’ of the component
  • Ask your supplier about component longevity
  • Look at the datasheet creation date – if it’s several years old, this could be an indication that the part may be due an upgrade sometime soon

Even when a component is due to become obsolete, it could be several years before this happens. This insight will be invaluable to your business.

  1. Get to the bottom of the type of obsolescence

If you get a notification that a component you use is becoming obsolete, take a step back and look into the reason why this is the case.

You can do this by looking at the PCN (Product Change Notification) which will provide the technical information you need.

If the component is a passive component, then there’s a good chance you will be able to source an equivalent component. If the component is an active component, you may have to upgrade to a newer component.

  1. How to deal with obsolescence when it happens

You have three options when dealing with obsolete components:

  • Equivalence – this is when you look for an equivalent component. You can cross reference many components, such as semiconductors, to find exact equivalents. You should review the datasheets to ensure cross compatibility.
  • Design – this is when you work with an OEM to manufacture a component on your behalf. It carries high cost but reduced risk because the component is unique to you. NANDs and micro-controllers are common examples.
  • Use old stock – somewhere in the world, there’s probably the component you need in storage. This is available if you can find it. An electronic component distributor is your best friend in this scenario to get the components you need.

If you are struggling to source your obsolete or hard to find electronic components Lantek is here to help. 

Contact us today.

Call: 1-973-579-8100

Email: Sales@Lantekcorp.com 

Website: lantekcorp.com