Material Constraints Update: April 2019

While material constraints are likely to occur through the rest of 2019, overall trends are are positive. Lead-times are decreasing in most component types and Burton Industries is seeing less allocation and backorders. Here is what our supply chain team is seeing by commodity:

• Analog – (Sensors, Power, Regulators ) Stable to Decreasing – 10-12 weeks.
• Batteries – Stable – 8-12 weeks.
• Connectivity (WIFI, Bluetooth, Cellular) Microchip lead-times increase to 18-20 weeks, many manufacturers Stable 12-16 weeks.
• Discretes (MOSFETS, Varistors, ESD, Didoes, Rectifiers)  Overall decreasing, however some lead-times are still high at 12-26 weeks.  Very positive signs here.
• Electromechanical – (Power Supplies, Relays) -Stable to Decreasing 10-14 weeks.
• 8 bit MCU, 32 bit MCU, LCD’s , FBGA– Stable to Decreasing.
• Interconnect –  Stable with the exception of automotive connectors which are extended 26-40 weeks.
• LEDs – Stable 8-10 weeks.
• Memory – Stable 4-12 weeks.
• Passives
  • Capacitors
    • Electrolytic – Still at 14-18 weeks with some pricing increases (NIC, Nichicon).  Panasonic is seeing Decreasing lead-times at 14-18 weeks with stable pricing.
    • Film Capacitors – Stable- Lead-times 12-16 weeks.
    • Tantalum Capacitors – Decreasing to 11-14 weeks, pricing is stabilizing.
    • Polymer Tantalum Capacitors – Stable 12-16 weeks.
  • Resistors
    • Fixed – Decreasing- Lead-times still high at 16-30 weeks.  Rohm is in allocation and selective pricing adjustments per market are still being made.
    • SMT General (Less than 1UF) Decreasing – Lead-times still range 16-30 weeks.

 

 

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China Tariff Update

While negotiations have been slow, resolution on a trade agreement with China that would eliminate the current tariffs seems to be continuing to move forward. According to Bloomberg News, line-by-line negotiation on an agreement with China is underway. The 10% tariff on printed circuit boards (PCBs) and components fabricated in China remains in place, but has not escalated. As mentioned previously, even with the 10% tariff, in many cases, China remains the most competitive option for PCBs. We continue to monitor the situation and review alternate sourcing options.

Stocking Arrangements to Mitigate Supply Chain Disruption

Material constraints continue to add challenges to electronics manufacturing. That said, the team at Burton Industries has implemented stocking arrangements with many of our customers designed to ensure that product will be available even when spikes in end market demand or further changes in material availability impact forecast assumptions. Our latest whitepaper, Common Stocking Arrangements to Mitigate Supply Chain Disruption, looks at the types of stocking programs available and their benefits and potential challenges. Read the full paper here.

Are Legacy PCBAs Costing Your Company Money?

While many consumer-focused electronic products have lifecycles of only six months, products that are highly regulated or utilized in industrial applications with limited need for frequent revision may have long lifecycles. So long, in fact, that they may still incorporate component technology that is several decades old.

Burton Industries’ latest whitepaper looks at ways that Burton’s team can assist with legacy PCBA redesign efforts. Read the full whitepaper here.

Is JTAG Testing Right for Your Product?

JTAG testing can represent a low cost solution for many low-to-medium volume products. Burton Industries’ latest whitepaper provides an overview of this test technology, along with its benefits and design considerations. Read the full paper here.

 

 

Market Cost Drivers 2019

Overall, there has been a 3.8% increase in base metal costs in 2018 and these increases may continue in 2019, particularly if a positive change in the tariff situation results in increased automotive production. Increases in cost of base metals are most likely to impact capacitor costs. For 2018 cost increases by commodity were:

• • Ceramic Substrate 30% increase
  • Palladium 20% increase
  • Ruthenium 275% increase
  • Tantalite (Tantalum Capacitors) – Steady increases throughout 2018.

Component Lead-Time Updates 12/2018

Constraints relative to Multi-Layer Ceramic Capacitors (MLCCs) have subsided a little, however it is still believed that there will be lead-time concerns and some allocation issues on some MLCC package sizes and values throughout 2019.

A major factor contributing to MLCC constraints was strong growth across automotive, industrial and telecom markets simultaneously. This increased consumption beyond manufacturers’ expectations. Additionally, there has been consolidation in the fabrication market and a relatively flat revenue trend. As a result, there was less incentive or return on investment for continuing commodity lines near end-of-life (EOL) or adding capacity.

The MLCC packages in North America that have the highest EOL risk are large case sizes above 0402 packages with low CV (below 1uf).

The team at Burton recommends that design teams consider what is “acceptable” when looking at alternate parts. For example, could higher voltage, tighter tolerance parts be used? Are analog electronic circuits an option? Where possible also consider smaller packages such as 0402, 0603 and 0201.

Resistor lead-times are reducing and stabilizing from 40-50 weeks to 12-20 weeks.  The worse constraints seem to be behind us.  The one exception is the Current Sense Metal Strip where market leaders are still at 50+ weeks.  This will subside through 2019 as Mexico factories are brought on line.  The difference between the capacitors and resistor shortage is that resistor companies did not consolidate or choose to EOL commodity lines the way capacitor manufacturers did.