Staying ahead of the global chip shortage

This article is part of TechXchange: Shortages of chips and counterfeits

One out-of-stock component can be the very bane of the best electronics design. As the global chip shortage drags on into its second year, access to electronic components has become a huge challenge for engineers. More challenges are likely to come as everyone fights for a limited chip supply.

But engineering teams can take steps before and during the development process to ensure they’re in the best possible position to navigate a new era of supply chain issues, industry experts say.

They said resolving component sourcing issues required working closely with internal and external sourcing and manufacturing teams. When engineers select components and suppliers without the help of procurement and procurement departments, they may overlook more realistic options or end up rushing to find parts or rushing to integrated suppliers, which can increase costs or cause product delays.

“Uncertainty and complexity are constants in business today. But global manufacturers have more control over managing their electronics supply risk than they realize,” said Supplyframe CEO Steve Flagg in a 2020 report. and lifetime cost of a typical hardware product are decided during the initial design of that product. Companies need to look at what happens in the design phase, because that’s where the disconnect often lies.

Engineering teams also need to build more flexibility into their designs, industry experts said, making it easier to replace rare components with secondary chipsets without sacrificing product quality.

Pain points

Supply chain issues are already putting increased pressure on engineers as companies rely on them to verify BOM availability as well as validate, specify and qualify spare parts. Electronics makers are working with a wider range of suppliers, including spot brokers, to try to respond to supply issues more quickly, with engineers being brought in to help vet secondary suppliers.

But the chip shortage isn’t just influencing where engineers look for parts for their designs. It also impacts how they design products, according to a report from US electronics retailer Avnet, citing a survey of more than 500 engineers. As lead times deteriorate and prices rise, more than 60% of engineers said they build products more based on component availability than preference.

Most engineers faced with out-of-stock components or long delivery times replace them with pin-to-pin replacements with different specifications (53%) or, if possible, instant replacements (49%).

Other engineers (55%) were forced to redesign products around new sets of components.

Cooperative mode

For years, engineers have been encouraged to build products using a “design for manufacturing” (DFM) strategy, designing a product specifically for ease of manufacture, with the goal of keeping costs low.

But designing for manufacturing depends on being able to source all the necessary components. At a time of widespread chip shortages, industry experts say engineering teams need to step up to the next level. Ted Pawela, ecosystem director at Altium, a leading provider of electronic design software for printed circuit boards (PCBs), urged engineers to use more of a “design-with-build” approach.

“What that means is that instead of completing a design and then getting build feedback, you get that feedback as your design progresses,” he said, reducing thus the risk of redesigns.

Last month, Altium rolled out a software tool called Altimade to help companies take the next step. Available on its Altium 365 cloud platform and connected to MacroFab’s manufacturing platform, Altimade promises to accelerate the prototyping process by uniting design, manufacturing and sourcing data and experts in the same dashboard. This opens the door for them to work on designs together.

Thanks to Altimade, customers have access to continuously updated prices and delivery times for components and manufacturing. The information helps them understand the implications of design decisions and react to unforeseen events such as natural disasters. Altium said Altimade also allows customers to order a PCB without leaving the design environment. Orders are fulfilled through MacroFab’s network of manufacturers.

“Companies that figure out how to leverage design with manufacturing will have a competitive advantage over companies that design and manufacture via business-as-usual methods,” said Joey Rodrigues, vice president of products at MacroFab. “Problems like where and how to secure the scary components [are] a distraction from what they do best.”

Design flexibility

But collaboration alone is not enough.

The electronics industry uses a sprawling global supply chain. Semiconductor components can travel more than 25,000 miles and cross 70 international borders before a customer gets the final chip, according to a report by the Global Semiconductor Alliance in 2020. That leaves the chain of supply with many potential choke points and vulnerable to unpredictable events, such as a fire or power failure in a factory.

The chip shortage has been complicated by outbreaks of coronavirus and more contagious variants. Logistical challenges have also added to the uncertainty, resulting in container ship bottlenecks at ports.

“Engineers come in and have to modernize designs for customers because they’re stuck,” said Peggy Carrieres, global vice president of sales enablement and vendor development at Avnet. “They ask us how to take off their products.”

“The next question is what can be done to design something more flexible from the start,” she said in an interview last year.

Carrieres urged engineers to seek additional sources for components such as microcontrollers that may be difficult to retrofit from another vendor. This way, if a supplier is out of stock of a component, you can switch to another supplier without having to repeat the entire qualification process. It also reduces the risk of encountering counterfeits, which can aggravate long-term design and quality issues.

Carrieres said engineers must take responsibility for building flexibility into new designs. This means designing a product in such a way that it can quickly replace components that were available at the start of their design cycle but are not available or pending allocation at the time of manufacture. She said companies want to have backup designs ready in case supply chain issues derail their top pick.

Uncertainty to come

Ultimately, engineers must prepare for more uncertainty in the coming years if they are to survive the chip shortage. Most industry insiders see the crisis path extending into 2023.

Read more articles in TechXchange: Shortages of chips and counterfeits

Abdul J. Gaspar