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Tag: supply chain

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Component Shortage

How are semiconductor companies dealing with current industry challenges

Semiconductor industry challenges

There are many challenges facing the chip industry, despite
the semiconductor supply chain no longer being in crisis.

Semiconductor industry challenges

Focusing on high-demand products

The semiconductor shortages are much more under control than they were between 2020 and 2022, but the effects can still be felt. There are various components that are in more demand, like surface mount devices (SMDs), multilayer ceramic capacitors (MLCCs) and SMD resistors. There are also whole industries taking a big hit, like the automotive
industry and consumer market.

Many companies have switched to manufacturing these higher-demand products to optimise production and profit during these shortages.

Capacity expansion

Some fabs are still dealing with manufacturing delays due
to closures and lockdowns. Although most of these facilities have reopened this year, but since lockdowns began several manufacturers have expanded their operations
in other countries.

There have also been several new initiatives to increase
domestic production and reshoring introduced recently. These include the US CHIPS Act, and the European
Chips Act, both of which aim to bolster their countries’ places in the global semiconductor market. With these expansion plans manufacturers’ capacity and ability to cater for customers has also increased.

New technologies and Industry 4.0

Advancements in robotics, AI, and digitalisation have greatly
improved the efficiency of the industry. As semiconductors and microchips have gotten more powerful but smaller, it has given rise to a new generation of technology. This, if implemented in a fab setting, can increase output and
improve speed without the need for more facility space.

Optimisation of current facilities might be expensive, but will benefit companies with a more immediate effect than building new fabs, which would take years.

There are many other initiatives that companies that can adopt to optimise in the wake of the supply chain chaos, including expanding their customer base and collaboration with other companies.

We’ve got you covered

Throughout the semiconductor shortages Cyclops has been
ensuring that its customers get the electronic components they need with the shortest lead times possible. 

No matter what the circumstances, our impeccable customer support will never change. To see our expertise first-hand, contact us at sales@cyclops-electronics.com or call us today on +44 (0) 1904 415 415. 

Categories
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
Electronic Components

Semiconductor industry and UK Government

UK government, semiconductor industry

The government has responded to a report released late last year on the UK semiconductor industry.

The report, released by the Business, Energy and Industrial Strategy (BEIS) Committee, details recommendations on how the UK semiconductor industry needs to improve to keep up with global development. It also emphasises the urgency to publish the UK’s long-awaited semiconductor strategy.

The Department of Digital, Culture, Media & Sport (DCMS) released the response to the report in early February. It is the latest in a chain of government responses to increased calls for government support for the semiconductor industry.

The response

Some of the main points covered in the response included:

·         The UK is currently working with international allies to guarantee and safeguard the security of the UK chip supply

·         It is important to protect the UK semiconductor industry from external national security threats

·         Cooperation and communication between the industry and the government should be established and maintained

·         The UK should not try and be self-sufficient, but should focus on its strengths and form partnerships to complete the supply chain

Among other topics discussed in the response is the recent purchase of Newport Wafer Fab by Nexperia. Due to certain concerns, Nexperia has been asked by the BEIS to sell 86% or more of the fab. The DCMS declined to comment any further on the matter because of future potential judicial review proceedings.

On a final note the DCMS said it would work closely with all government departments, the BEIS and the Department for International Trade to make the publication and execution of the UK’s semiconductor strategy successful for the industry. The response did not, however, give a timeline for when to expect the long-anticipated strategy.

A quick recap

The UK semiconductor strategy has been in the works for around two years at this point. It is yet to be released. Apparently, it was due to be published in November 2022, but there is still no sign of it.

Many tech-oriented organisations, committees and unions are calling for more urgency on the part of the government. Even before the strategy was announced, people were petitioning for more funding and priority on the UK’s chip industry.

Days after the government response was published, the BEIS, who submitted the original report, was disbanded by the Prime Minister. It has been replaced with the Department of Energy Security and Net Zero

There is still much anticipation for the coming semiconductor industry strategy and the changes it may bring.

Global presence

 

Cyclops’s office is based in the UK, but we have a global network of offices and partners here for you. No matter what component you’re looking for, we can help. Contact Cyclops today on +44 (0) 1904 415 415, or email us at sales@cyclops-electronics.com. 

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

Supply chain adaptability

Supply chain
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Connectivity within our supply chain is a positive thing. It has given us access to resources from all over the world, boosting production and sourcing. However, covid and other factors have highlighted the risk that comes with having a globally connected supply chain.

If covid was the only concern, though, the supply chain would have recovered by now. The general increase in supply and demand has also left the industry struggling to catch up.

If there is a disruption to one area of the supply chain, this is then passed down the line to customers. At every step of the supply chain, the delays are exacerbated and impacts the economy.

Connectivity and interdependence have always been essential in the electronics industry, whether it is relying on other countries for materials or working with international foundries on production.

Certain countries had, and some still have, covid-related restrictions in place to stop the potential spread. This means that plants in those countries have had difficulty keeping up with demand. As one of the biggest exporters of electronics is also in this position, some countries are choosing to transition away from working with them.

Some large companies have already made the decision to move their base of operations to mitigate this risk in the future. This has the potential to massively shift industry dynamics and encourage other businesses to make similar moves.

Funding is being allocated by some governments to facilitate nearshoring or reshoring of companies, which would bolster the supply chain. Many countries, including the US, UK and India, are increasing the budget and support of domestic chip production. There will be several ongoing effects from this, including an increase in skilled workers, R&D and more in-house production.

Although this would be beneficial there would still need to be materials sourced from countries including places in turmoil. Even relocating a percentage of the supply chain will not resolve these sourcing conundrums. However, it would reduce shipping times and customs charges for the finished product, especially if production is closer to customers.

As much as it would be beneficial to reshore or nearshore production, it comes with certain risks. The cost of labour varies largely depending on location, as does the number of skilled workers. Additionally, the delay or difficulties associated with moving production halfway around the world will also be numerous.

Many countries have put measures and funds in place to encourage moves, but financial aid will only reach so far.

More than a long-term static solution, the supply chain needs to be flexible and adaptable. Supply, demand, and the world in general is very volatile right now. As such, suppliers and manufacturers will have to alter their ways of working accordingly.

Cyclops has the rare advantage of being able to source electronic components from all over the world. This, combined with our keen eye and careful inspection processes, means we can find and supply the components you need.

Call today on +44 (0) 1904 415 415 to speak to a member of our sales team, or contact us at sales@cyclops-electronics.com

Disclaimer: This blog is meant purely for educational or informational purposes and is in no way instructional.

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
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
Component Shortage Electronic Components Future Supply Chain Technology

Ukraine – Russia conflict may increase global electronics shortage

Due to conflict between Russia and Ukraine, both of whom produce essential products for chip fabrication, the electronic component shortage across the globe may worsen.

Ukraine produces approximately half of the global supply of neon gas, which is used in the photolithography process of chip production. Russia is responsible for about 44% of all palladium, which is implemented in the chip plating process.

The two leading Ukrainian suppliers of neon, Ingas and Cryoin, have stopped production in Moscow and said they would be unable to fill orders until the fighting had stopped.

Ingas has customers in Taiwan, Korea, the US and Germany. The headquarters of the company are based in Mariupol, which has been a conflict zone since late February. According to Reuters the marketing officer for Ingas was unable to contact them due to lack of internet or phone connection in the city.

Cryoin said it had been shut since February 24th to keep its staff safe, and would be unable to fulfil March orders. The company said it would only be able to stay afloat for three months if the plant stayed closed, and would be even less likely to survive financially if any equipment or facilities were damaged.

Many manufacturers fear that neon gas, a by-product of Russian steel manufacturing, will see a price spike in the coming months. In 2014 during the annexing of Crimea, the price of neon rose by 600%.

Larger chip fabricators will no doubt see smaller losses due to their stockpiling and buying power, while smaller companies are more likely to suffer as a result of the material shortage.

It is further predicted that shipping costs will rise due to an increase in closed borders and sanctions, and there will be a rise in crude oil and auto fuel prices.

The losses could be mitigated in part by providing alternatives for neon and palladium, some of which can be produced by the UK or the USA. Gases with a chlorine or fluoride base could be used in place of neon, while palladium can be sourced from some countries in the west.

Neon could also be supplied by China, but the shortages mean that the prices are rising quickly and could be inaccessible to many smaller manufacturers.

Neon consumption worldwide for chip production was around 540 metric tons last year, and if companies began neon production now it would take between nine months and two years to reach steady levels.

Categories
Electronic Components Future Supply Chain Technology

Could Graphene be used in semiconductors?

A new discovery

Graphene was first isolated at the University of Manchester in 2004. Professors Andre Geim and Kostya Novoselov were experimenting on a Friday night (as you do) and found they could create very thin flakes of graphite using sticky tape. When separating these fragments further, they found they could produce flakes that were one atom thick.

Geim and Novoselov were awarded the Nobel Prize in Physics for their ground-breaking experiments in 2010, and since the two had first identified the material since the 60s it had been a long time coming.

Despite its thinness Graphene is extremely strong, estimated to be 200 times stronger than steel

Is silicon outdated?

Semiconductors are inextricably linked to Moore’s Law, which is the principle that the number of transistors on a microchip doubles every year. But that observation Intel co-founder Gordon Moore made in 1965 is now losing speed.

Silicon chips will very soon reach their limit and will be unable to hold any additional transistors, which means that future innovation will require a replacement material. Graphene, with its single-atom thickness, is a contender.

In 2014 hardware company IBM devoted $3 billion to researching replacements for silicon as it believed the material would become obsolete. The company said as chips and transistors get smaller, as small as the current average of 7 nanometers (nm), the integrity of silicon is more at risk.

IBM revealed its new 2nm tech last year, which can hold 50 billion transistors on a single silicon chip, so the material is not going obsolete just yet.

Disadvantages

Graphene is nowhere close to being a replacement for silicon, it is still in the development stage and the cost of implementing it into supply chain would be extensive. A lot more research and adjustment is required, and it would have to be introduced step by step to avoid prices skyrocketing and supply chains breaking down.

Graphene is not the only contender to be the replacement for silicon either. Carbon nanotubes are fighting for prominence, and other 2D materials like molybdenum disulfide and tungsten disulfide are also vying for the position.

Another disadvantage of Graphene is that there is no bandgap, which means the semiconductor can’t be switched off. The possibly jagged edges of the material could also pierce the cell membranes which may disrupt functions.

Other applications

Thanks to its 2D properties Graphene is also being studied for its potential uses in other areas. In relation to semiconductors there has been research from Korea on the uses of graphene as a filtration device for semiconductor wastewater. The oxide-based nanofiltration membranes could remove ammonium from the wastewater created by semiconductor production so it can then be recycled. As a wider application of this Graphene could be used as a filtration device for water or to remove gas from a gas-liquid mixture.

Graphene is also being researched for its uses in the biomedical field, which include being a platform for drug delivery, bone tissue engineering, and ultrasensitive biosensors to detect nucleic acids. Graphene has other sensor-based uses, because the sensors can be made in micrometre-size they could be made to detect events on a molecular level, and could be of use in agriculture and smart farming.

There is a possibility Graphene could be combined with paint to weather-proof or rust-proof vehicles and houses, and to coat sports equipment. It also could have potential within the energy field for extending the lifespan of lithium-ion batteries.

When can we expect change?

Consultation company McKinsey estimated there would be three phases to the implementation of Graphene, none of which have begun just yet. Phase one would be to use Graphene as an ‘enhancer’ of existing technology, and will simply improve other devices by extending the lifespan or improving the conduction. This phase is estimated to last for ten years, after which phase two will begin. In this step graphene will become a replacement for silicon and will be the next step in the improvement of semiconductors and electronics. After 25 years we can expect the next step in graphene applications, things we can only dream of now.

In the meantime, people will still be using silicon-based semiconductors for quite a while. If you’re on the lookout for chips, or any other day-to-day or obsolete electronic components, contact Cyclops today at sales@cyclops-electronics.com, or use the rapid enquiry form on our website.

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