Eradicating device obsolescence

Story

September 15, 2014

George Karalias

Rochester Electronics

Device obsolescence is the status of a part when it is no longer available. The problem of obsolescence is very prevalent in microelectronics technology as the life cycles for microelectronic parts are often in conflict with equipment life cycles. In addition, microelectronics technology has a long history of obsolescence issues. Obsolescence extends beyond electronic parts to other materials like textiles and mechanical parts. In addition, obsolescence can also appear in software, specifications, standards, processes, and packaging technologies.

Over the past several decades, technology has advanced rapidly, causing components to have shorter procurement life spans. Driven by the consumer product sector, new and better components are being introduced more frequently, rendering older components obsolete. Quickly examining the dynamic shifts in the semiconductor market from the 1980s to today, it is easy to see why semiconductor obsolescence is a growing problem for many original equipment manufacturers (OEMs).

Semiconductor market in the 1980s:

Packaging was standard across many companies
Parts were often dual-sourced
Digital was almost all 5 volt operation
Department of Defense (DoD) was a significant share of the market (military has longer product life cycles)

Semiconductor market in the 1990s:

Fabless operations rose to prominence
Parts rarely dual-sourced
DoD insignificant technology driver
Digital technologies vary in voltage
Packaging differentiation expands and goes offshore
Consumer products drive volume

Semiconductor market in the 2000s:

Huge crash of semiconductor market in 2001
Public company stock punished for inventory build-up post-crash of 2001
All high-end digital devices in unique packages including flip-chip
DoD drops to single-digit percent of market
Portables are biggest market

Semiconductor market today:

DoD less than one percent of the semiconductor market
Average consumer life cycle 2-5 years maximum
All digital products are unique, silicon through packaging
Process technology development driven primarily by portable markets (low voltage, reduced temperature range, consumer life cycle)

Today, obsolescence at the largest foundries is occurring with .35-µm technology and accelerating as to when that obsolescence happens. Acceleration of obsolescence is happening because consumers thirst for the latest gadgets, and consumer silicon drives volumes at leading-edge foundries. The leading consumer products push the leading processes for the best-cost basis as one of the main goals. Those .35-µm designs going through obsolescence are only 10-15 years old from when they were first prototyped and after less than 10 years in production. There are many systems out there that need longer than 10 years for product and/or where the cost of requalification is huge. Smaller foundries continue to offer process nodes long after the big volume foundries have left the market. The traditional life cycle of electronic parts includes several phases: development, introduction, growth, maturity, and finally decline (phase-out and discontinuance), which can lead to device obsolescence (see Figure 1).

Figure 1

(Click graphic to zoom)

For example, Figure 2 displays the possible impact of obsolescence in the design process of a sonar system. This figure shows that already 70 percent of the commercial off-the-shelf (COTS) parts in this system have reached end of life (EOL) and are obsolete before the first system is installed. While technological advances continue to fuel product development, engineering decisions regarding when and how a new part will be used and the associated risks involved with a new part and technology differentiate the winning from the losing products.

Figure 2: Percentage of commercial off-the-shelf (COTS) parts that are out of production (unprocurable) versus the first 10 years of a surface ship sonar system’s life cycle. (Courtesy of NAVSURFWARCENDIV Crane.)

(Click graphic to zoom by 1.9x)

Obsolescence management

Unfortunately, the discontinuing of semiconductor devices is inevitable. Every product and technology has a life cycle; it is only a matter of time before a semiconductor device is discontinued by the manufacturer to make way for the next-generation part. Once a manufacturer discontinues a product and an EOL announcement is made, customers typically have six to 12 months to decide whether they want to place a last-time buy, or find an alternative solution for its system. OEMs need to strategically plan for EOL events in order to mitigate device obsolescence scenarios.

A semiconductor EOL announcement can create a costly inconvenience for customers, as it can be difficult to accurately forecast last-time buy requirements or absorb the additional inventory and storage costs associated with last-time buys. Customers supporting applications with long-term service requirements such as government, military and aerospace, and other OEMs can find themselves servicing and maintaining a product in the field for years without the support of an original semiconductor manufacturer. Depending on the length of the OEM’s production and maintenance schedules, customers may be forced to project more than a decade out into the future to estimate the procurement requirements of the obsolete semiconductor device.

Inaccurate estimations can create costly problems for the OEM. If the OEM does not procure enough devices, supply diminishes faster than expected and the OEM must quickly find an alternative source so as to not shut down production or to discontinue maintenance and repair services. Purchasing too many devices affects the bottom line, as the last-time buy costs are coupled with the semiconductor storage costs.

EOL planning important

It is not enough for a customer to react to an EOL notification, as by that time a new source of semiconductor devices already needs to be identified and qualified as an authorized source for authentic and reliable parts. A plan should be implemented, perhaps as early as at the time a semiconductor is designed into the end equipment, in order to find a suitable new source for the critical semiconductor part. It is important for customers to have a proactive mindset for the EOL announcement of critical semiconductor components to ensure continuous manufacturing with traceable, high-quality semiconductors.

By implementing an EOL plan, OEMs will have sufficient time to investigate the alternatives to making a last-time buy or dealing on the potentially dangerous gray market where counterfeits and substandard devices are more common. Alternative solutions include finding a drop-in replacement, partnering with an authorized continuing manufacturer, or redesigning the system.

A drop-in replacement part matches the original semiconductor device and provides a “pin-for-pin” alternative to the obsolete device. If supplied by an authorized source, this solution enables a customer to bypass many of the obstacles that the other options below carry. A “pin-for-pin” replacement is not easily found, and may require some recertifications and requalifications for mission-critical applications.

If a drop-in replacement cannot be procured from the original manufacturer, one option is to redesign the system to eliminate the part and use a different device in its place. A redesign can be costly, however, not only from engineering personnel hours and the purchasing of new devices, but also from production downtime as the new system goes through the retesting and requalification processes. For many customers, a redesign may not be a feasible option due to the higher costs and increased lead time associated with system certification.

A more suitable solution for many companies is to partner with a contractually-licensed continuing manufacturer that can provide a continuous supply of qualified parts. These authorized manufacturers engage with the original semiconductor manufacturer to acquire the remaining inventory, including packaged devices, finished devices, die, selected intellectual property, tooling, test programs, and test equipment, thus extending the life of the semiconductor series. This transfer of technology assures there is no interruption of authorized, certified, and traceable devices in the supply chain. By engaging with an approved continuing manufacturer, a new semiconductor life cycle is created, subsequently eliminating device obsolescence.

The most effective way to mitigate the risks and costs of obsolescence is to accommodate rapid component changes by changing product designs and production processes quickly, easily, and inexpensively at all levels. However, this is not always feasible. Planning ahead for inevitable EOL events can ensure a continued supply of vital semiconductor devices without downtime. OEMs already faced with finding a replacement for an obsolete part can engage with companies that are authorized by original semiconductor manufacturers to build legacy parts using the suppliers’ original die.

George Karalias is the Director of Marketing and Communications for Rochester Electronics and has worked with the company for more than 10 years. His experience in the high tech and computer industries started in 1983 when he graduated from Boston College.

Rochester Electronics 978-462-9332 www.rocelec.com