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Category: Supply Chain

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Supply Chain

Korea Japan trade relations

Chipmaker material suppliers in Korea have been earning
more from domestic semiconductor companies who have been looking for local suppliers.

Domestic supply

Since export restrictions were put in place by their
neighbours, Korean chipmakers like Samsung Electronics have been using local suppliers. This has led to suppliers in Korea more than doubling their earnings in the last four years.

Japan’s restrictions affected areas including photoresist
chemicals and hydrogen fluoride used in chip manufacture. Fluorinated polyamide for organic light-emitting displays was also affected.

The restrictions were first changed back in mid-2019, and
since then 16 Korean materials companies saw combined sales grow by approximately $15 billion between 2018 and 2022.

The affect

Korea Semiconductor Industry Association VP and COO, Ahn Ki-hyun, said Korean companies weren’t damaged by the restrictions. He said, however, the restrictions may have impacted Japanese companies attempting to export to South Korea.

One of the toughest materials to re-source was hydrogen
fluoride gas, used for etching in display production. Much of this has been replaced since 2018 to lower-purity gas produced in Korea.

Despite some of the restrictions now being lifted, the
domestic suppliers that have been adopted may stay for good.

Recent relations

Just last month the two countries came together and agreed
to lift many of the restrictions. Korea has continued to promote using domestic suppliers even if restrictions are eased.

In general the chip industry has not changed much, other
supplies and exports between the countries have stayed the same. In light of the changes it will be interesting to see how the Asian chip market now develops.

The US Chips Act will also affect these new business
relationships. Market shares might change, and only time will tell how the industry will shift as a whole.

Global presence

 

Cyclops Electronics supplies to countries and partners all
over the world. We pride ourselves on our accessibility and level of customer service. If you’re struggling to find electronic components or reliable distributors, contact Cyclops today and see first-hand how a good business
partnership can benefit you. Email us at sales@cyclops-electronics.com, or call us on +44 (0) 1904 415 415. 

Categories
Supply Chain

What is computational lithography?

Computational lithography is a process that could speed up the chip design time.

There are many things that need to be considered when designing or manufacturing a semiconductor. In the early stages the chip’s design will have to be developed – a process that could take considerable time.

As chips get smaller and more powerful, the complexity increases. This means more advanced manufacturing methods have to be considered, sooner rather than later.

Photo lithography

The photo lithography process is when the semiconductor design is etched onto the wafer. It uses a series of light and radiation exposures to etch the semiconductor design onto the substrate wafer. During this process the wafer can be deformed because of the physical and chemical effects.

There’s more and more need for high accuracy in the etching process. There also ideally should be a way to predict or negate any errors caused in the etching. The errors can come from diffraction, the resist used, and a number of other things.

Computational lithography

Computational lithography is a method of simulating chip lithography. It uses algorithms representing the manufacturing process, gathered from test wafers and machines. By running chip designs through a computer the resolution of the pattern can be increased.

This is becoming more essential as chip designs become smaller and higher resolution designs are needed.

The models used in in the simulations plan ahead for the potential physical and chemical effects of the photolithography, deforming them purposely to demonstrate the final effect.

Further developments

A big name in the industry has recently released a software library which will further speed up the design process. This could apparently enable the creation of new lithography solutions and faster turnaround times.

Computational lithography has only been around since the mid-2000s. Following the term’s first use it quickly got adopted industry wide.

A clear picture

 

Cyclops stock a range of different components with a variety of node sizes. Whatever electronic component you’re looking for, Cyclops can help. With our global contacts and huge stocklist, we can ensure competitive lead times and prices. Call us today on +44 (0) 1904 415 415, or email us at sales@cyclops-electronics.com. 

Categories
Component Shortage Electronic Components Supply Chain

Chinese New Year shipping delays

The earlier-than-usual Lunar New Year celebrations may cause more disruption than normal, according to shipping experts.

Lunar New Year took place between January 22nd and February 5th 2023. The festival is well-known for causing shipping delays and supply chain disruption. The effect this year, however, may be exacerbated.

Not only have factories been affected since early January, but there has also been several Covid outbreaks causing factory lockdowns.

Planning ahead

Normally staff begin taking leave a couple of weeks before so they can travel home. This means even late December saw a chaotic rush of exports and manufacturing. According to a survey of supply chain professionals, almost three quarters (73.5%) thought the festivities would cause delays.

The survey, conducted by Container xChange with 2,300 respondents, with 55% saying they had planned ahead for New Year.

The factory closures are predicted to continue for some time, well beyond the end of celebrations in China.

The previous decrease in demand meant there had been several blank sailings from Asia. This is when an ocean freight operator cancels or alters routes.

However, the combination of New Year, Covid and the already disrupted supply chain could limit shipments able to leave China.

A different climate

Compared to previous years there is a lot of inventory currently. This leads to a whole array of other issues, including port congestion and capacity management. Usually there is a small surge pre-empting New Year, which hasn’t really occurred this time around.

Freight rates are the lowest they have been since 2019, and
prices to the East Coast are 83% lower than last year.

Many supply chain professionals are concerned there will be a second wave of shutdowns after New Year. Since so many people are gathering and meeting, there could be enough infections to once again halt production.

Further down the line this would add to the workforce shortages affecting the already congested ports.

Much of the stock is sitting in the port for a prolonged time, and while plenty of containers are available, there are fewer transport trucks. 

Don’t worry…

When it comes to electronic components, Cyclops Electronics is an efficient and reliable provider. We have more than 30 years’ experience in this industry, and we’re sure we can provide what you need. Get in touch today at sales@cyclops-electronics.com, or call us on +44 (0) 1904 415 415.

Categories
Electronic Components Supply Chain

Top car brands affected by semiconductor shortages

Semiconductor Shortage

The semiconductor shortages have had a significant impact across a lot of industries. One hit the hardest has been the new vehicle market. Here are a few of the companies that have been the worst-affected:

Jaguar Land Rover

Certain models have been almost discontinued by the brand, which apparently is to catch up with demand for other models. Waiting lists for popular Range Rovers are over a year long, with sales suspended in some markets. There will be some production decreased so more resources can be used for popular models.

Toyota

The company was forced to cut its annual output target since production was lower than expected in the second half of the year. Currently demand is still higher than supply, so factories have been forced to shut on certain days. Supplies of Corolla, RAV4, and Yaris are supposedly the most affected.

Ford

Similarly to Toyota, Ford was forced to cut production at several factories, and things haven’t improved much since. Ford’s CFO said he didn’t think any relief was coming. Ford’s CEO said both semiconductors and EV battery materials were in high demand, and would be for the next decade.

Volvo

In late 2022 Volvo announced the temporary closure of one of its factories. The company’s biggest shareholder has also been affected by shortages, with its profits allegedly falling by 55% in the first half of 2022.

Honda

Honda’s profits were mostly due to the weakening value of the yen, making its results seem more positive. These skewed results were mostly due to the chip shortage, with 3.8 million vehicles predicted to be cancelled in 2022. This is, however, a huge improvement on the 11.3 million cancelled in 2021.

The executive vice president of Honda said he doesn’t believe the worst of the shortages has passed. The American production of CR-V and Civic models were severely affected.

Stellantis

The amalgamation of Jeep, Dodge, Alfa Romeo and Fiat has been dealing with shortages since its inception. The company is currently overhauling the entire line-up to work towards a majority of low-emission vehicles.

Thanks to this, Stellantis is in need of more semiconductors than ever. However, apparently profits rose in Q3 2022, with sales of battery electric vehicles rising by 40%. If this continues, things may slowly begin to improve for the company.

Volkswagen

The company have said they have around 150,000 unfinished cars in need of semiconductors. Because of ‘geopolitical developments’, namely tensions between China and the US, it believes shortages will continue for a year minimum.

Nissan

Nissan went from predicting the sale of 4 million units to 3.7 million in 2022. This, they said, was down to China lockdowns and general semiconductor shortages. Production issues have been relatively localised, with China production falling by 23.5%. This balanced the gain in output at Nissan’s other factories.

Nissan has been trying to use alternative chips and dual sourcing to bypass some of the current shortages. If this is successful, there may be a positive outlook for the company again shortly.

Mazda

Mazda was reportedly struggling so much in November 2022 that they couldn’t even predict output for the following two weeks.

Things have not gotten much better, with predictions that supply will be limited until the end of 2023. It also predicted the lowest-priced car trims will see the strongest growth thanks to the looming recession. However, Mazda expects a rise in profits this year thanks to the struggling value of the yen.

GM

The American company has allegedly 95,000 unfinished vehicles waiting for semiconductors. This is harming its storage and sales, and will continue since the unfinished vehicles are those in high demand.

Despite not meeting demand, GM is still predicting strong sales and fewer supply disruptions in 2023.

Overall

Many companies expect the shortages and supply chain issues to continue throughout 2023. Some are hopeful, however, that as supply eases, so too will the financial pressures they currently face.

A reliable source

In the past Cyclops Electronics has helped several car companies source electronic components they couldn’t find elsewhere. We have a huge stocklist and a professional sales team that can find what you need at the best price. Contact us today at sales@cyclops-electronics.com, or call us on +44 (0) 1904 415 415.

Disclaimer

The information in this article has come from various sources, including Slash Gear’s article, Car Companies That Were Impacted Most By The Semiconductor Shortage.

Categories
Component Shortage Electronic Components Supply Chain

Cyclops Electronics – Looking back on 2022

Cyclops Electronics has had a monumental year. With a hugely successful Electronica, an exciting business acquisition, and plenty of special team moments to remember. 2022 has made its mark in style.

 

Team wide fun and games

This year we have initiated a weekly delivery of fresh fruit for all of the office to enjoy. It has proved to be a big hit and a great boost of natural goodness into the working day. It’s the perfect antidote to our regular pizza days.

For Stress awareness month in April, we organised picnic lunches for everyone and raffled off a wellness hamper.

At Halloween we stirred up a right cauldron of treats, a quiz curated by a staff member, and a Mummy wrapping game to get everyone in the spooky spirit.

We also celebrated Valentine’s Day, Wimbledon, and most recently the World Cup with full office decoration and goodies on tap. To mark the festive period hot chocolate and mince pies are now a permanent fixture in our kitchen.

Christmas fundraising has been great fun, supporting ‘Save the Children’ with Christmas jumper day and producing a sizeable contribution to a worthy cause.

 

Halfin

In April the Cyclops Group officially announced the acquisition of Belgium-based company Halfin Electronics. Shared values of collaboration, family values and dedicated professionalism made it a natural fit for the Group.

Halfin has enabled Cyclops to add Belgium to its list of international offices, including USA, China, Canada, Italy and Portugal.

The business was established in 1946, and has since built a global clientele and a speciality in vacuum tubes and other niche electronic products. It has been a wonderful addition to the Cyclops family.

Electronica

Electronica was the event of the year for all of us here at Cyclops. A team of nine staff from a range of departments attended the event. Aside from meeting a plethora of new customers, we also caught up with a lot of returning customers. The event was very important to us, since there hasn’t been an in-person Electronica since 2018. We were eager to reconnect with clients and businesses.

Not only did the team make lasting connections with businesses there, but were able to bond as a team and successfully run a trade fair stand. We’re so proud of them for continuing a Cyclops tradition that has been in place for decades.

And finally… 

A few words from our Sales and Marketing Manager, Ros Shaw:

“2022, what a year it has been… looking back at heatwaves, weather extremes, component shortages, supply chain disruption, political turmoil, economic uncertainties and more shortages, it’s been another eventful one. But one constant remains and that is that the Cyclops Team have delivered, day in and day out.

It was a real highlight of our year to chat with many of our appreciative customers at Electronica in Munich. Sharing plans for the New Year, developing strategies for sourcing in 2023 and discussing upcoming projects has enabled us to prepare. And that’s what it’s always been about, preparing and equipping the business to best serve the needs of our customers. Now more than ever we strive to adapt, evolve and innovate to keep stride with this fast-paced world.

We look forward to ranking highly on your ‘most useful’ list this time next year. Thank you for including us in your team. Here’s to 2023 and all of its adventures.”

 

Categories
Electronic Components Future Supply Chain

India increasing chip manufacture

In recent years India has been increasing its share in the electronics industry, planning to become a hub in the future.

Currently India has a lot of dependence on imported chips, heavily relying on the Chinese supply chain. One of its goals is to be, in part, autonomous in its chip production. The supply chain issues brought about by covid and other global factors really highlighted this.

But it is not easy to just move production of something so complicated to another country. It would require massive amounts of funding to reshore production.

Make in India

In 2021 the Indian government announced funding equal to $10 billion to improve domestic production over the next 5 years. Several companies have put in bids for the funding, including Vedanta, IGSS Ventures, and India Semiconductor Manufacturing Corp.

The funding is part of the Government of India’s ‘Make in India’ plan, encouraging investment and innovation in the country. Prime Minister of India Narendra Modi announced the initiative in 2014, focusing on 25 sectors including semiconductors and automobiles.

Domestic reliance

One of India’s goals is to move away from reliance on imports, on which they currently spend $25 billion annually. Only 9% of India’s semiconductor needs are met domestically. If production is reshored in part, this would increase local jobs and income for the country.

As it stands, India currently has more of a focus on R&D but don’t have fabs for assembly and testing. The nearby Singapore and manufacturing powerhouse Taiwan provide most of its current stock.

A change in the air, and in shares?

The recent approval of the Chips Act in the US means there may be a shift in industry shares. At the moment America has a 12% share, but if production is re-shored this may impact the Asian market.

However, India and the US, alongside the UAE and Israel plan to form an alliance. With financial aid from the bigger players, the alliance plans to focus on infrastructure and technology.

India was the US’s 9th largest goods trading partner in 2021, with $92 billion in goods trade in 2019. India is also the EU’s 10th largest trading partner, but with domestic semiconductor industry growth this might change.

India’s end equipment market revenue was $119 billion at the end of 2021. Its annual growth rate is predicted to be 19% in the next 5 years.

India is aware of the importance of the semiconductor industry, and set up an India Semiconductor Mission (ISM) in 2021. Its goal is to create a reliable semiconductor supply chain, and to become a competitor against giants like the US.

Relish the competition

India’s potential in the semiconductor industry is increasing, and there is likely to be more investment in the future. It is difficult to tell how much further down the line it would be before India becomes a competitor, but the coming years are sure to be interesting.

Categories
Electronic Components Supply Chain Technology

Price hikes in the electronics industry

Chip prices will continue to increase, despite some component lead times improving. This is due to inflation, labour shortages, and scarcity of raw materials, among other things.

Intel was the latest company to announce price increases, which it will supposedly introduce at the end of this year. It joins firms including TSMC, Samsung, and Texas Instruments in raising the cost of its products.

As has become very clear, the pandemic contributed to supply shortages the world over. However, there have also been issues with labour shortages, material sourcing and the increasing costs of everything.

Reverse psychology?

Processors are increasing in price at Intel and other companies. It has been suggested that this actually may be due to oversupply. If the cost of the components is increased vendors are more likely to buy the stock before it occurs. As they stock up, Intel’s supply levels will decrease. This may lead to shortages in the long-term.

These increases are due to be introduced at the end of 2022, but people are suspicious it may happen sooner. If prices are instead increased in autumn, they can be discounted for events like Black Friday and Christmas.

War and price

Inflation is causing the price of materials to increase also, which inevitably would be passed down the supply chain. The price of raw materials was always going to increase over time, but the conflict in Ukraine has exacerbated this. Gases like neon, which is used in semiconductor production, is almost wholly (70%) sourced by Ukraine. Similarly, 40% of krypton gas is also from Ukraine, which is in conflict with Russia.

Aside from these materials, the price of lithium, cobalt and nickel, used for EV batteries, is also rising. The EV industry already had price hikes when the pandemic began, when the chip shortage took its toll. Now, following the 15% increase in 2021, automakers are facing another potential price increase.

Expansion

One of the largest players in the industry, TSMC, announced its price increases would take place in 2023. Despite not being as severe as first speculated, the 6% price increase will be enough that customers will notice.

Aside from the cost of raw materials, electricity and labour expenses, TSMC is also expanding. To fund this expansion it is increasing the price of fabrication.

Could we have stopped it?

Years before the pandemic, as far back as 2017, there were signs that a shortage was on its way. New technologies were mounting and other geopolitical difficulties were afoot. Even then, the best way to avoid this would have been to redesign the tech and improve the fabrication process. This would have been a time-consuming and expensive process, and whenever it happened it would result in delays and losses.

Conclusion

The amalgamation of all these factors will lead to lasting price increases for electronic components. Even if these prices are discounted in peak times like Black Friday or Christmas, suppliers will still have to deal with inflation and material shortages.

The expansion plans of some of the industry’s big players, and the cost of the tech to sustain them will also lead to price increases. How long the effects of these will last, we’ll have to wait and see.

Categories
Electronic Components Supply Chain Technology

PCB assembly

Circuit boards, Assemble!

We’re not quite the Avengers, but we do know a thing or two about assembly.

As an electronic component supplier, Cyclops works to get customers the electronic components they are looking for. Further down the line, manufacturers construct the printed circuit boards (PCBs) featuring our sourced components.

The assembly of a PCB is a delicate and painstaking process. Just one millimetre of misalignment could mean failure of the whole board. Here’s a brief run-down of what’s involved.

Applying solder paste

The first step in the assembly of a PCB is applying a layer of solder paste. The PCB is overlayed with a stencil, and the solder paste is applied over this. The right amount must be used, as this is spread evenly across the openings on the board.

After the stencil and applicator are removed the PCB will be left and moves on to stage two.

Pick and place

The automated placement of the surface mount devices (SMDs) is done by a ‘pick and place’ robot.

The pick and place machine will have a file containing all of the coordinates for the PCB’s components. Every component will have its X and Y coordinates and its orientation included. This information enables the robot to place components on the layer of solder on top of the PCB accurately.

Reflow soldering

From the pick and place machine, the PCBs are directly transferred to a 250⁰ oven, where the solder paste melts and secures the electronic components to the board. Immediately after this, the boards are moved into a cooler to harden the solder joints.

The alternative to reflow soldering is a process called wave soldering. Much like the name suggests, in this method a ‘wave’ of solder moves across the board instead of being pasted on to start with.

Inspection

Once the reflow solder is cooled the PCBs are checked. If anything became misaligned or any solder or components are in the incorrect position, this inspection mitigates the risk to the customer.

When it comes to inspection methods, there are a few options:

Manual inspection – The most basic form of inspection, done with the naked eye. Better for PCBs with through hole technology (THT) and larger components.

Optical inspection – Using high resolution cameras, machines can check large batches of boards for accuracy at a high speed.

X-ray inspection – Give technicians the ability to check inner layers of multi-layer PCBs. This inspection method is usually reserved for more complex boards.

What a Marvel!

Cyclops Electronics can supply obsolete, day to day, and hard to find components to PCB manufacturers. We can source components efficiently to keep your production line running. Contact us today at sales@cyclops-electronics.com, or use the rapid enquiry form on our website.

Categories
Component Shortage Electronic Components Future Supply Chain Technology

Procurement executives concerned about digital innovation

Manufacturers are using digital advancements to battle current supply chain disruptions.

Almost all (97%) of those surveyed said they had significant disruptions in their direct materials supply chain.

67% said they were not confident that the technology can cope with the current or near-future challenges.

The most significant technology disadvantages seem to come with lack of visibility into supplier, ‘disjointed’ source-to-pay process with multiple systems, and a lack of spend reporting.

Even more (87%) said modernising the manufacturing procurement and supply chain takes precedence, and it is their biggest challenge yet. A further 92% said avoiding disruptions to their supply chain is their main goal for this year.

Among the main concerns for modernising the supply chain are potential disruptions during implementation, skills shortages, and scale and challenge of change management.

Around half of those surveyed (44%) predicted that the supply chain crisis would begin to calm by 2023. Significantly less (18%) thought it would reduce by the end of this year.

The study surveyed 233 senior procurement executives from US and UK manufacturing companies. It was commissioned by Ivalua, a spend management cloud provider.

See the original press release from Ivalua here.

While Covid-19 was seen as a factor in the supply chain instability, it was not the only culprit. Global supply chains had already been in a vulnerable position, partly due to factors like too much outsourcing and an overreliance on ‘just-in-time’ supply management.

What some are calling ‘outdated technologies’ are slowly being replaced in Industry 4.0. However, the implementation of tech like IoT, AI, machine learning and cloud computing is not a quick process.

The issue may be that this transition period would only further add to the current shortages rather than solving them in the short-term. Most companies are being deterred by this potential loss, and have been avoiding the change for as long as possible.

Whenever digital innovation comes, it will be a gradual and time-consuming process, but businesses will be better off for it.

Categories
Electronic Components Future Supply Chain Technology

What is fabless production?

A fab is short for ‘fabrication’, which is a facility that produces electronic components. When it comes to fabless production, it refers to when companies outsource their manufacturing. The development of fabless production is a pretty recent development, but one that has flourished since its conception.

How did it come about?

Fabless production didn’t exist until the 80s, when surplus stock led to IDMs offering outsourced services to smaller firms. In the same decade the first dedicated semiconductor foundry, TSMC, was founded. It is still one of the biggest foundries in operation to this day.

In the following years many smaller companies could enter into the market as they outsourced manufacturing. More manufacturers, each with different specialities, also came to the fore.

Advantages

One of the original reasons it became so popular was due to the cost reduction it provided businesses. With the actual semiconductors being manufactured elsewhere, companies saved money on labour and space.

With production outsourced, companies also had the ability to focus more on research and development. No doubt this gave way to many advancements in semiconductor technology that wouldn’t have been possible otherwise.

Having a choice of which manufacturers to work with is beneficial too. Depending on your requirements you can choose someone who best suit your needs.

Disadvantages

When you outsource production, you are putting part of your business under someone else’s control, which can be risky. There could be a higher chance of defects if manufacture isn’t being directly overseen.

It also means that, in terms of quantity of product and price of production, you don’t have total control. If a manufacturer decides to change the quantity they produce or the price, customers are limited to their options. They either have to accept the changes, or search for an alternative which, in a fast-paced market, would be risky.

Conclusion/Disclaimer

The fabless business model, as it is known, will probably continue long into the future. TSMC’s continued profit, among other companies, is a key indicator of its success. And with big names like Apple, Qualcomm and Nvidia working fabless, it would be safe to say it’s popular.

That’s not to say that an integrated business model, with every stage of production occurring in-house, is a bad choice either. There are many just as successful IDMs like Samsung and Texas Instruments.

For a ‘fab-ulous’ stock of both foundry and IDM components, check out Cyclops Electronics. We specialise in obsolete, day to day and hard to find electronic components. Send us your enquiry at sales@cyclops-electronics.com, or use the rapid enquiry form on our website.

This blog post is not an endorsement of any particular business model, and is purely for informational purposes.

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