Electronics Production | June 12, 2012
One of every two counterfeit parts is obsolete
Obsolete parts have accounted for slightly more than half of all counterfeit-part reports during the last 10 years, highlighting the critical importance of obsolescence management for the electronic supply chain, according to IHS.
A total of 57 percent of counterfeit-part reports from 2001 through 2012 have involved obsolete or end-of-life (EOL) components. Another 37 percent were active parts. In all, these counterfeit incidents represent many millions of parts in circulation in the supply chain. As reported recently by IHS, considerably more than 12 million parts have been involved in global counterfeit incidents in just the past five years, equating to more than one counterfeit part every 15 seconds during that period. “Some have said that if you can avoid all obsolete parts, you can eliminate all the risk of counterfeits,” said Rory King, director, supply chain product marketing at IHS. “However, this is untrue for many reasons. Among them, obsolete parts represent only a portion of the counterfeit scourge, with active components accounting for a significant share of all counterfeits reported. Moreover, it’s unrealistic or technically infeasible to economically eliminate the use of all obsolete parts. This underscores the critical need for electronics buyers to arm themselves with the right methods and tools to manage both obsolete and active critical components.” Management in this regard includes knowing exactly which counterfeit parts being circulated within the supply chain by using insight from firms like ERAI Inc., as well as by monitoring rising price and lead-time trends that signal attractive market conditions for counterfeiters. “Industry figures suggest that a single incident of an obsolete part can cause as much as 64 weeks of down time and $2.1 million to resolve,” King said. “On parts lists, bills of materials, or assemblies that encompass as many as 30,000 parts, it’s typical that 10 percent or more of these components are obsolete, showing what a significant cost obsolescence carries. “And, given that more than more than one in two counterfeit parts is an obsolete component, the need to forecast obsolescence and have access to alternate part and supplier options is crucial to avoiding both obsolescence costs and counterfeit risk,” King added. Built-in obsolescence Obsolescence is inevitable for a number of reasons, most notably that the product lifecycles of components are much shorter than the products in which they are used. This is especially true for long-lifecycle or complex products such as automotive, industrial, medical, aviation, or telecommunications equipment that use once-current, but now-outdated, components. Although it afflicts many markets, the issue of obsolete parts in long-lifecycle gear is most dramatically illustrated in the defense/aerospace industry. For instance, the B-52 bomber had its first flight in 1952 and is set to end its service in 2040, nearly 90 years later. Meanwhile the Department of Defense (DoD) recently extended the life of the bomber by 15 years. “If the demand picture changes or the end customer extends the life of a project by more than a decade, it can have the effect of creating a sudden shortage of critical parts for replacements and maintenance, forcing buyers to find new sources, or to seek alternative parts,” King noted. “Meanwhile changes in the supply base—like the enactment of a regulation such as the European Restriction of Hazardous Substances Directive (RoHS)—can result in diminishing manufacturing sources and material shortages (DMSMS). When RoHS came into force in 2006, 20 percent of all components were discontinued above and beyond what buyers were expecting. Another 20 percent of components were unexpectedly discontinued in 2007. Manufacturers attributed these events specifically to the shift to lead-free components. If a product is 20 or more years old, you simply can’t avoid obsolete parts, which are prime breeding ground for counterfeits", he continued. Even new systems can be subject to the obsolete-part problem. In one dramatic example, more than 70 percent of the components used in a surface ship sonar system were obsolete—even before the first system was installed. The disaster within the disaster Even those companies that are most conscientious about avoiding counterfeit and obsolete parts may be forced to deal with riskier sources, as illustrated by the Japan earthquake in 2011. Following the quake, 60 percent of companies that purchase electronics reported they increased their buying activities for components whose supplies were affected by the quake, according to an IHS iSuppli survey. A full 40 percent of those companies said they increased the use of the open market or other independent supply chains to source critical parts. More than half of the companies—at 55 percent—said they recognized that there would be an increased risk of counterfeits from widening their supplier bases. Following the quake, there was an acceleration in EOL notices, as many suppliers stopped production of some parts more quickly than expected. “The scenarios created during the Japan crisis exposed multiple companies in many more industries than ever before to the risks of counterfeit and obsolete parts,” King said. “The earthquake showed that any time there is a supply disruption, supply chain behaviors change dramatically and risk can increase very quickly for all companies.” Managing the risk “Obsolete parts are unavoidable, and represent a major element of counterfeit part detection and avoidance,” King said. “Because of this, obsolescence planning is critical. Electronics buyers need to know as quickly as possible which parts are obsolete, which parts are being phased out, and when parts have become EOL in order to mitigate costly obsolescence issues. It’s critical that firms are aware of alternative parts they can use as replacements, and which safer suppliers they can utilize to access those components. “However, as important as it is, obsolescence management solves only part of the counterfeit equation. To explicitly address counterfeit parts head-on, organizations must understand which counterfeit parts are actually in circulation and being reported, regardless of whether they are obsolete or active,” King added. “Furthermore, constant vigilance in supply planning for parts is necessary to stay ahead of component price and supply chain health issues and to ensure continuity of supply from safer, approved and trustworthy part sources.”
U.S. polysilicon makers laud Phase 1 of China deal The United States’ three remaining manufacturers of polysilicon expressed appreciation to President Trump and praised U.S. negotiators for securing the Chinese commitment to purchase U.S. polysilicon in the first phase of the U.S.-China trade deal.
Dupont explores divestiture of electronics unit Following its recent USD 26.2 billion deal to sell off its nutrition business, DuPont de Nemours Inc. is weighing a divestiture of its electronics unit, according to people familiar with the matter.
AMD bolsters exec leadership team AMD has announced several promotions and one new hire to its senior leadership team, in an effort to enable the company’s continued growth in the high-performance computing, graphics and visualization technologies market.
Webasto opens new battery centre in Jiaxing Webasto has inaugurated its new roof plant and battery center in Jiaxing (Zhejiang Province) close to Shanghai.
Panasonic to expand its manufacturing footprint in India Panasonic is looking to build a new wiring device factory in southern India. The new factory is scheduled to start production in autumn 2021, responding to the increased demand in the country.
Season Group strengthens wireless R&D & manufacturing capability Season Group has invested in, and installed, two high-speed and high-precision wireless communication testers - Rohde & Schwarz’s R&S CMW500 Wideband Radio Communication Tester and R&S CMW100 Communications Manufacturing Test Set.
Rocket Lab expands capabilities in So Cal Rocket Lab announced this week it will open a new facility to serve as its corporate headquarters and provide increased production capacity.
PCB Piezotronics unveils new clean rooms PCB Piezotronics Inc., a wholly owned subsidiary of MTS Systems Corporation, has announced the completion of environmentally controlled clean rooms at their DePew, New York facility.
European loudspeaker company brings production back home Difficulties manufacturing smaller design series among reasons for the decision to return back to base.
China only region to register pure-play foundry market growth Rise of China-based fabless IC suppliers offers increased opportunities for foundries, IC Insights states in a recent report.
Mycronic receives first SLX order Swedish production equipment specialist, Mycronic, has recieved their very first order of its mask writer SLX.
600 new German jobs as VARTA expands production again The lithium-ion battery market continues to experiencing growth, currently the market is poised to continue to move forward with an annual growth of about 30% – and VARTA wants a big piece of the pie.
FTG achieves S9100D certification at acquired PCB fab Firan Technology Group Corporation has completed and received AS9100D Certification from SAI Global Ltd. for its recently acquired PCB manufacturing facility located in Fredericksburg, Virginia USA (formerly Colonial Circuits Inc.).
Dutch block sale of technology, China miffed Following ASML’s denial of an export license by the Dutch government to sell a piece of critical chip-making technology to the Chinese, China’s ambassador to the Netherlands has issued a statement expressing his country’s displeasure.
DuPont aids S. Korea in photoresist shortage The office of Korea’s Ministry of Trade, Industry, Sung Yun-mo, met with DuPont President Jon Kemp last week to confirm DuPont’s investment in the country’s need for diversification of its EUV photoresist supply.
Volvo building U.S. battery assembly plant In preparation for bringing a new line of electric vehicles to the U.S. market, Volvo announced it will build a battery assembly plant at its existing facility in Ridgeville, South Carolina.
New game consoles expected to trigger demand surge for graphics DRAM and SSD's TrendForce expects the year-end release of new generation game consoles to trigger a demand surge of graphics DRAM and SSD's during the second half of 2020.
A new year begins with new machinery at Swedish Microwave In Motala, Sweden sits Europe’s oldest manufacturer of Low Noise Block down-converters (LNB) for the global satellite market, namely Swedish Microwave (SMW). The company is now kicking off 2020 with an investment in production.
Lucid eyeing April reveal of pre-production sedan Luxury EV manufacturer Lucid has announced that production is underway in Silicon Valley of 80 beta prototypes of its luxury sedan, Lucid Air, to be unveiled in April in New York City.
Ideal Industries moving the ball forward at Cree Following its March announcement that Cree had sold off the entirety of its lighting business to Ideal Industries in a USD 310 million deal, Ideal said it would remain dedicated to pumping investment dollars into the now privately-held Cree Lighting.
Former pSemi exec and CEO Jim Cable retires pSemi Corporation has announced the retirement of former CEO and long-term executive Jim Cable.
Rohde & Schwarz inks agreement to use Benchmark's muscles The German electronics group has signed a strategic agreement with US EMS provider, Benchmark Electronics, to enhance its manufacturing capacities.
Stoneridge appoints new VP of operations Stoneridge Inc. has announced Kevin Heigel as its new vice president of operations.
Gartner: Worldwide semiconductor revenue declined 11.9% in 2019 Intel reclaimed top spot in global semiconductor market; Samsung moved to no. 2.Load more news