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Component Shortage Electronic Components

Equivalents keep the supply chain moving in uncertain markets

Equivalents, who?

In uncertain markets, the demand for specific, branded components tends to outstrip supply. We have seen this recently with the semiconductor shortage, where specific chips are hard to come by at a time when they are needed. Equivalent components, also known as equivalents in the industry, provide an immediate solution. These ‘generic’ parts can be specified when specific parts can’t be sourced. With means that in cases where parts no longer need to be from one brand.

Successive cycles of electronic component shortages (especially in the semiconductor sector) have led to manufacturers specifying equivalents on their order sheets. Outside of sectors that have precise specifications for safety, like aerospace and biotechnology, these equivalents are helping to keep supply chains moving.

Equivalent in quality and specification

One of the common misconceptions about equivalent components is that they are somehow castoffs or second-best components. This is untrue. They are simply equivalent components from a different brand/maker/OEM.

The term ‘equivalent’ is used to describe components that can be used as substitutes for specific components. They meet the size, power, specification and design standards set by design teams. They are ‘like-for-like’ on the spec sheet.

The quality aspect of equivalents is only a concern when the electronic component distributor cannot verify the provenance of the components. At Cyclops, we only source genuine, verifiable components. We would rather expand our supplier base than source a batch of equivalents that we cannot be sure of.

A pragmatic approach to managing supply

Companies that are fixated on using specific components run the risk of running into roadblocks. There is a global shortage for chip passives and discrete semiconductors and this problem is expected to last through 2021.

Specifying equivalents is a pragmatic approach to managing supply chains in uncertain markets for several reasons. For the customer, generic specification reduces supply chain risk. It allows the customer to meet demand requirements without the risk of backorders, supply constraints, or being outbid by other companies.

The biggest benefit is flexibility. Rather than be tied to what is in stock and what you can source from an OEM, you can specify a value and chip size for passives, or a generic diode designation, and let your distributor source equivalents.

If you want to give yourself the best chance of meeting the demand for scarce electronic components. Equivalents will need to form part of your supply chain. Otherwise you run the risk of disruption and higher procurement costs.

How we can help you

Cyclops specialises in the procurement and delivery of electronic components and parts for a wide variety of industries from the world’s leading manufacturers.

We can source equivalent components for you from our global network. All we need is a value and chip size for passives or a generic diode designation for actives. We will work with your spec sheets and source high-quality, equivalent components.

If you are currently experiencing an electronic component shortage, we can helpEmail us if you have any questions or call us on 01904 415 415 for a chat with our team.

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Electronic Components Lead Time Forecast

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Electronic Components Future

Keeping pace with high power terminal block demand

High power terminal block demand is soaring with the buildout of EV charging infrastructure. The reason is simple – high current requires high power terminal blocks, making these components essential for EV charging stations.

The rapid growth in the adoption of electric vehicles is fuelling demand for high power terminal blocks beyond what most people expected.

The UK Government’s decision to ban petrol and diesel cars from 2030 has accelerated the buildout of EV chargers, leading to significant new investment by leading companies like Tesla and BP Chargemaster. There are now more than 35,000 charge points across the UK, a figure that is expected to increase by 10,000 in 2021.

The big barrier to purchase with electric vehicles is a lack of charging infrastructure and slow charge times. Building more charging stations is the simple solution to this problem, but bigger, better high power terminal blocks are also needed for the next generation of rapid chargers that will provide power up to 350 kW.

What is ‘high power’?

Anything above 40 amps is classed as high power. All public electric charging stations significantly exceed this amount. High power terminal blocks are typically available up to 125 amps and higher for custom applications.

We need terminal blocks capable of handling higher currents when the charging speed demand increases for the station. EV chargers are classified in three categories: Level 1, Level 2 and direct current. Whether a charger is AC or DC, the higher the current, the higher the power draw, so the more robust the terminal needs to be.

Terminal block specifications

Terminal blocks serve as a routing tool for wiring. They are simple components, used to connect circuits together and provide an electrical ground for the circuit.

Screw terminal, push button and push-in terminal block styles are available. These accommodate different types of circuit design. The module type can be interlocking or single-piece with a plug or receptacle housing.

Terminal blocks for EV charging stations are optimised for this specific purpose and they are normally rated for at least 150% of the max current.

Meeting the soaring demand for high power terminal blocks

Unlike semiconductors, there is no immediate shortage of high power terminal blocks. They are available in the tens of thousands per order.

There is competition between the EV and renewable energy industry for high power terminal blocks though. Both industries are significant consumers of these components and demand is increasing with new electrical installations.

Other in-demand components for electric vehicle charging infrastructure include battery connectors and high voltage connectors designed to handle the heat of EV charging. These connections need to be small but also thermally efficient.

Do you need help sourcing terminal blocks?

Cyclops is a leading supplier of high power terminal blocks and connectors to the electric vehicle and renewable energy markets. We are a global distributor with access to the widest range of electronic components for all applications.

You can find out more about what we do hereEmail us if you have any questions or call us on 01904 415 415 for a chat with our team.

Categories
Counterfeit Components

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 unauthorised 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:

  • Colour variances
  • Misspellings and incorrect labelling
  • 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 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 capitalising 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 organisation. 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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Component Shortage Electronic Components

Why We’re Facing a Global Semiconductors Shortage

The world is experiencing a semiconductor shortage at a time when demand for semiconductors is at an all-time high. Manufacturers can’t make enough of them and this is now having an affect on the availability of products.

You probably remember last year Sony released the PlayStation 5 and Microsoft released the Xbox Series X. AMD released the Big Navi GPU (RX 6000) and Apple released the iPhone 12 range. What all these products have in common is they were all directly affected by the semiconductor shortage. Demand well and truly exceeded supply.

What’s causing the shortage?

A perfect storm has hit the semiconductor market. It isn’t one thing but a combination of different things that’s causing the shortage today.

The COVID-19 pandemic

When the COVID-19 pandemic hit, car and commercial vehicle sales took a hit. Estimates suggest that sales fell by 50% or more within a single month. In response, car manufacturers scaled back orders for semiconductors and other parts.

At the same time, demand for electronics chips soared as more people spent time working from home and on furlough.

Laptops, smartphones, drones, smartwatches, tablets, kitchen appliances – everything has a semiconductor nowadays. Then you have IT, data centres, internet infrastructure and cloud and edge computing. All are powered by semiconductors.

And so, the factories that were at capacity making semiconductors for cars switched to making semiconductors for electronics. This caused semiconductors for electronics to have a higher margin which benefited these factories. However, it has caused a problem for car manufacturers who now need to ramp up production.

The situation now is this – car sales are picking up and car manufacturers are fighting for orders against electronics manufacturers. Factories are at capacity and can’t make enough to go around. This is feeding through to nearly every sector.

Ultimately, this is the result of poor planning from car makers who cut orders too deeply last year at the beginning of the COVID-19 pandemic.

Manufacturing limitations

Even before the COVID-19 pandemic hit, there weren’t enough factories to meet semiconductor demand. There were long lead times in 2019 because semiconductor demand outpaced the ability of factories to make them. This problem has persisted through to 2021 and has been compounded by the COVID-19 pandemic.

With most factories running at 99-100% capacity, there is very little room for boosted output. You would think that the solution is to build more factories, but this would not solve the problem today or even a year from now because semiconductor fabs take at least a year to build with another 6-12 months in setup time.

Semiconductor manufacturers are investing in new factories, expansion and more efficient technologies, but short-term solutions these are not.

The US is attempting to bring semiconductor manufacturing to US soil to remedy this or at least reduce dependency on foreign suppliers.

US and China trade war

Calls for domestic manufacturing are heating up in the US and China, the result of a trade war brought about mostly by supply chain disruptions related to the COVID-19 pandemic.

Reports in May 2020 that the Trump administration was in talks with Intel, TSMC, and Samsung about building US chip factories proved true. In 2021, with a new president and Biden administration, these talks are persisting.

The reason a technology trade war broke out between the US and China is because the US imposed a 25 per cent tariff on $34 billion of Chinese imports in 2018. There has been bad blood ever since with threats and action on both sides.

This eventually affected the semiconductor supply chain because in 2020 the US turned to export restrictions targeting the semiconductor supply chain to safeguard critical infrastructure in the telecommunications sector. This followed a 2019 ban on the Chinese company Huawei for “national security reasons”.

For example, one of the consequences of export restrictions was that American firms were cut off from chips made by China’s Semiconductor Manufacturing International Corporation – the third largest chip maker in the world with 11% market share.

Local production problems

Factory shutdowns due to natural disasters, bad weather and the COVID-19 pandemic have caused semiconductor supply chain issues.

Most of the world’s semiconductors are manufactured in Taiwan. Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, has a 28% market share. The second largest, UMC, also based in Taiwan, has a 13% market share.

Taiwan is experiencing serious water droughts in 2021. Millions of tonnes of water are required to manufacture semiconductors every week. Taiwan Semiconductor Manufacturing is having to bring water in on trucks and UMC are doing the same. This has caused significant drops in manufacturing efficiency.

The US is also experiencing shutdowns. NXP Semiconductors had to shut its plant in Austin, Texas, due to winter weather in February 2021.

Factory shutdowns cause order backlogs and extended lead times. Orders persist and pile in whether a factory is down or not. This squeezes supply chains, causing a shortage.

How long will the semiconductor shortage persist?

We expect the semiconductor shortage to persist through 2021 but ease towards the end of the year as demand for electronics chips decreases as COVID-19 lockdowns end. This will cause a shift in supply from electronics semiconductors to automotive semiconductors which will provide the industry with a much-needed equilibrium.

The world’s largest semiconductor manufacturers – TSMC, UMC, SMIC, Samsung, Intel, SK Hynix – are investing in increased output. Many investments were in the pipeline as early as 2019 and are expected to yield results at the end of 2021.

Right now, there is a serious imbalance in the demand for semiconductors, one that our existing infrastructure is not built to cope with. This imbalance will ease over time. 

How can supply chains continue to meet demand?

If you have been impacted by the semiconductor shortage you can meet demand by partnering with an electronics components distributor like us.

We specialise in the procurement and delivery of semiconductors and parts for a wide variety of industries from the world’s leading manufacturers. You can find out more about what we do hereEmail us if you have any questions.

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