Every EE and PCB designer is feeling the pinch of component shortages these days. How in the world have basic standard capacitors become scarce? When are we going to see the end of this annoying state of affairs? How can designers work around these shortages and get their work done--on time?! I gave John Watson of LeGrand a call to ask these questions and more. As a PCB design lead who oversees 50 designers globally, I knew he’d have a lot to share on this subject. (Keep an eye open for an upcoming OnTrack Podcast with John Watson in which we will discuss this subject in more detail).
Judy Warner: John, please give us a snapshot of your perspective on the shortages of parts and which parts are particularly difficult to get these days?
John Watson: About 6-12 months ago this whole part shortage really started to hit pretty hard. It started with mostly the multi-layer ceramic capacitors (MLCC) and the tantalum capacitors with longer lead times. Then available stock began to disappear, and before we knew it was the perfect storm and an international crisis.
Where we stand now, we’re seeing lead times for some components in the short range up to 16 weeks, medium as high as 32 weeks and long lead times as far out as 80 weeks. Which means if we order a component today it would arrive in April of 2020.
This all started with the capacitors, but we are seeing other components series being sucked into this problem.
- Board Mount Temperature Sensors (~ 5 Week Lead Times)
- Power Switch ICs (~ 6 - 10 Week Lead Times)
- MOSFETs (~ 26+ Week Lead Times)
- Suppressors / Diodes (~ 49 Week Lead Times)
- Operational Amplifiers & Relays (~ 52 Week Lead Times)
- Thick / Thin Film Resistors (~ 6 to 80 Week Lead Times)
Warner: Fill us in on what's driving this shortage?
Watson: It has come down to a simple principle in the economy of Supply and Demand. While the supply has gone way down, the demand for many components has absolutely exploded.
From what I see, there are 3 main sectors of the electronic industry that are driving these component shortages.
#1. Internet of Things (IoT)
There's been an absolute explosion in the demand for smart devices — from Smart TVs, Bluetooth speaker systems, Amazon Alexa and Googlehome to renewable energy products, solar panels and Cloud Computing. We have a SMART everything. We have refrigerators that track your location and knows you are at the market and sees that you need milk and sends a text to remind us of that fact. According to Gartner, there will be more than 20 billion new IoT devices deployed by 2020 which will be a 100 percent growth in the number of these devices in the next two years. My feelings regarding that is that’s a lot of hardware.
#2. Mobile Phone Industry
There has been a huge increase in personal phone usage and it was recently reported that it has actually doubled since 2015. It is estimated that approximately 1.5 billion smartphones will be manufactured in the upcoming year and each flagship model contains roughly 1,000 capacitors. At the present moment, there is an estimated worldwide production of 3 trillion MLCC capacitors. That means that nearly 50% of the MLCC capacitors are designated and used strictly in the mobile cell phone sector alone.
There is now double-digit growth in the Hybrid and Fully Electric vehicle industry. But the advancements here have spilled over to the general Gasoline vehicles with the addition of new technologies in automation of via automated driving systems (ADS). All the new automated gadgets such as parking sensors, auto windscreen wipers, etc.
A standard combustion engine car, has somewhere between 2,000 to 3,000 capacitors. An electric vehicle has up to 22,000 MLCCs required in a single car.
Furthermore, the higher temperatures inside the control circuits of electric vehicles mean that traditional plastic film capacitors are no longer suitable, so ceramic MLCCs are increasingly being used. Which has brought about a new regulatory agency of the Automotive Electronic Council (AEC). The mission of the AEC is to promote the standardization, reliability or qualification standards for automotive electronic components including high-temperature/high-humidity resistance, thermal shock resistance, and durability.
Of course as a new agency they needed new standards and requirements:
AEC-Q100: Integrated circuits (ICs)
AEC-Q101: Discrete semiconductor components (transistors, diodes, etc.)
AEC-Q200: Passive components (capacitors, inductors, etc.)
With these new standards it is estimated that nearly 50% of the components tested have failed. Which has resulted in a five-fold increase in the demand for these specific electronic components.
Warner: How long do you think this will last, do you see a resolution on the horizon?
Watson: That is a million dollar question. But I do not see this ending anytime soon. Because of several main reasons:
#1. The expected massive growth in the electronic industry in the next few years. According to Statista, they are estimating a growth of 6% in 2019 and even more at 8% in 2020. This is great news for our entire industry. It comes with some major problems. First, will there be enough coffee to support this massive engineering effort and secondly, all this new growth will require new hardware and units.
#2. Many of the part manufacturers have started to end entire component lines that are less profitable for them. The parts on the chopping block are some of the larger package or case sizes. Such as anything above 0603 for the discrete components. Why? Because they are closing those lines to transfer them over to the more needed components. This narrows the component selection and reduces the supply.
#3. The other reason is more a self-inflicted problem that we have brought unto ourselves. Many of the part vendors have now switched over to what is called allocation. Where they are dividing the available inventory so only a percentage of the stock is given to specific manufacturers. On the vendor side they want to work with those companies that want to place the biggest orders. So those companies get into the “quo” and get first dibs. On the company side this has caused an absolute panic. To make sure that they have the available components the now common practice is to double and triple the orders. They then stockpile these components for future use. This has only put further strain on an already fragile system of Supply and Demand.
Warner: Since you manage a team of 50 or so designers at LeGrande, how is this specifically impacting you and your design team?
Watson: This has had a huge impact on us at. From the very first day of a new design. It has forced us to question what components we are using, but the problem is we don’t know what the specific conditions are from moment to moment. We have seen that from both sides of the issue, being that things we thought would not to be a problem became a problem halfway through a design and vice versa. It has gotten so bad actually that when we did find components before we could fill out a PO and get the information to them minutes later, the parts would be already gone. What I have told all our designers is to follow a simple rule: It is not business as usual.
With the belief for some not to allow a crisis to go to waste, many black market and counterfeit components have started to pop up. I have seen in our little part of this industry parts that we believe were absolutely fake because they did not match the specs according to the datasheet. So the components we can find and get into designs cannot be trusted. My only response to that is…OUCH.
Warner: What are some workarounds or solutions you are employing to get through this challenging time?
Watson: We have had to design outside of the norm. Since we have seen that there is a narrowing of the supply and reduced supply for some components, we have had to be flexible. Meaning we are looking and seeing if any of the specific parameters of a component can be adjusted out of what would be considered the “norm”. For example: Do we need to use a 0.1uF 1% cap for our bypass caps? Since this is the most common bypass cap value, everyone is scrambling for that specific component. We have been able to open more stock of components by changing the parameters, for example instead of using a 1%, taking it up to a 5% tolerance. I see many times the components used are “overkill” for the class of design, but making that simple change has resulted in a whole new stock of components.
Another work around for us has been the PCB designer driving other areas of the process. Meaning that we now are giving over to procurement the pitfalls they will have in the component area. This is based on using ActiveBOM, which will we discuss in a few minutes. Before it was the other way around: engineering and procurement many times wouldn’t even speak to one another. Now we are making sure that the information readily available to us through ActiveBOM is being filtered throughout the company.
Lastly, we have started to use what we call multi footprint components laying multiple footprints on the design for alternative components that we might use if there is a shortage of our first choice. Now this has resulted in some interesting layouts to accommodate everything.
Warner: If this does persist, how can designers continue to be proactive and nimble and continue to design well and deliver on time?
Watson: Actually there are the three “Ps” of the getting through this crisis: Plan, Prepare, and be Proactive.
Stay ahead of the problem by not starting with a design that is already in trouble. Many times engineers will use a previous design thinking that those components are available. When actually some of them may be obsolete or in a deprecated state already. We cannot assume that everything is ok. If you see that parts are already having stock problems or not recommended for new designs, that situation will not get any better over time, it will actually probably be worst. Furthermore, realize the further someone gets into a design the harder it is make changes without it impacting your wallet or your time schedule.
The Altium Designer tool, ActiveBOM has become one of the most important things for us. Since knowledge is power, being able to have “live” component stock availability information, appropriate and approved AVL’s, the ability to rank vendors and set up multiple sources, and vendors for each component have become major for us. Now since we can have this information readily at our fingertips, we do not need to wait until the back end of a design to find out that we just created the company’s latest door stop and stock of bad PCB’s. Once we get that schematic done, we are able to run it into ActiveBOM and find out where our problems are.
If there was a second rule after “It is not business as usual”, it would be to check component availability often throughout the design process.
Warner: Any resources you would recommend to stay abreast of the situation?
Watson: Yes, many of the component vendors put out their component forecast. Stay aware of trends in our industry. Stay informed. The sooner you know of the problem or the direction, the sooner you can make a sound decision on needed changes. This will require you to read the electronic journals and news. Stay up to date on what is being reported by some of the great PCB industry trade publications such as I-Connect-007, EDN, All About Circuits, PCDandF, EE Journal and others.
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