Over the last few years, a variety of factors have made sourcing electronic components exceedingly difficult.
The U.S.-China trade war led to tariffs and export restrictions that have adversely impacted the semiconductor supply chain. More recently, the coronavirus pandemic prompted manufacturing stoppages and travel restrictions that ground the industry to a halt. As COVID-19 continued disrupting the sector, a global chip shortage emerged and introduced marketplace-wide shipping delays and stockouts.
The world’s leading chipmakers leaders anticipate the industry will return to normalcy by 2023 as new, more geographically diffuse capacity comes online.
But tomorrow’s solutions cannot help manufacturers today. Thankfully, OEMs, CMs, and EMS providers can source hard-to-find microelectronics by following certain best practices.
Reevaluate Your Designs and to and Expand Your Supply Chain
First and foremost, companies looking to navigate the landscapes procurement challenges need to expand their supply ecosystems.
Currently, top component makers simply do not have enough capacity to meet the global market’s demand. Even Tier 1 part vendors with significant capital and foundry service provider support have recently been unsuccessful in protecting their partners from multibillion-dollar financial losses. Since chipmakers will not regain their equilibrium for some time, manufacturers need to make major changes to compensate.
Two significant OEMs in the automotive sector found success by changing their sourcing methods in recent months.
Tesla, the world’s largest electric vehicle company, faced a severe problem due to the microelectronics shortage last summer. Unable to buy the parts that power its bestselling cars, it faced a devastating production shutdown. However, the firm pivoted by acquiring “substitute alternate chips” and updating its automobile firmware.
Consequently, it generated over $1 billion in revenue while its contemporaries initiated major layoffs and temporary plant shutdowns.
Similarly, Nissan discovered it could not source the custom semiconductors that supported its fleet’s braking systems. In response, the firm’s engineers revamped a circuit board design to accommodate an off-the-shelf component. That simple change enabled the company to keep its factories open and save money by purchasing more affordable generic parts.
Tesla and Nissan’s actions show that openness and flexibility are mission-critical for success in the current semiconductor landscape.
Avoid Working with Unverified Suppliers
In addition, manufacturers need to do their due diligence when looking to work with new vendors. Unintentionally connecting with a disreputable chip vendor has always been a risk, but that threat has intensified recently. OEMs, CMs, and EMS providers need to know that criminals view the global chip shortage as an opportunity.
Fraudsters are now targeting electronic device makers using two strategies. One, scam artists are posing as reputable part vendors with ample stock of components that can be shipped immediately. Criminals use fake listings to trick companies into paying them for phantom chips.
Industry watchdog group ERAI reported that bad actors had defrauded professional buyers out of hundreds of thousands of dollars amid the worsening chip shortage.
Another way criminals have worked to take advantage of the chip crunch is by distributing counterfeit parts.
The Wall Street Journal discussed how sophisticated con artists use search engine optimization to deceive unsuspecting manufacturers. These fraudsters create accounts on popular e-commerce platforms and offer difficult-to-source microelectronics. And after accepting payment, unscrupulous individuals have sent their victims fake and defective parts.
Since some leading online marketplaces do not verify the legitimacy of their merchants, their customers are left vulnerable to counterfeiters. For that reason, manufacturers should only work with trustworthy suppliers that operate through legitimate marketplaces.
Otherwise, firms leave themselves open to existential risks by chasing deals that are too good to be true.
Use a Trustworthy Online E-Commerce Marketplace
Traditionally, professional buyers employ an analog method to source electronic components. Procurement specialists contact manufacturers, distributors, and third-party vendors to acquire the parts needed to keep their companies running. However, exchanging emails and playing phone is an inefficient, time-consuming process that leaves OEMs at a severe disadvantage, especially during periods of volatility.
Sourcengine, an online microelectronics marketplace, is a solution for firms’ supply chains hurdles.
Customers can visit its website and browse through over 1 billion component listings. Moreover, the service features product details, datasheets, lifecycle status, and, if applicable, alternates. It also hosts upfront pricing and shipping information, lead time quantities, and delivery dates. Established by long-time industry professionals, its design prioritizes seamless purchasing functionality.
In addition, Sourcengine offers an extensive range of products from more than 3,000 fully vetted suppliers. Its listing includes products from manufacturers, distributors, and third-party providers. Plus, the marketplace maintains an extensive vendor rating system to ensure the quality of the parts moving through its network. That means buyers can use the expansive marketplace to source items that are otherwise unavailable.
For example, Texas Instruments’ TPD4S009DRYR TVS diode has become highly in demand in the new year.
Third-party manufacturers have taken an interest in the component because of its utility in set-top boxes, laptop & desktop computers, and point-of-sale equipment. Its USB 2.0, HDMI 1.4, SATA, and ethernet interfaces make it incredibly versatile. Sourcengine has hundreds of thousands of factory direct TPD4S009DRYR units available with immediate delivery. It also offers additional supplies from multiple reputable indirect vendors.
The marketplace also hosts ample quantities of TI’s popular LM5008MM/NOPB switching regulator that can be shipped worldwide right away.
The part has an input voltage range of 6V to 95V with an integrated 100V n-channel box switch. The device is also notable for not requiring any loop compensation, its ultrafast transient response, and its capability to maintain consistent operating frequency with varying line voltage and load current. Those characteristics make the LM5008MM/NOPB ideal non-isolated telecommunications buck regulators and 48V automobile systems.
Finally, Sourcengine operates worldwide. It employs procurement agents, inspectors, and warehouse personnel to facilitate the movement of electronic components. Its global reach allows it to help American manufacturers secure shipments of hard-to-find parts from trustworthy Asian suppliers. And that its logistics network enables it to move products from one corner of the globe to another with maximum speed.