Component Lead-Time Updates 12/2018

Constraints relative to Multi-Layer Ceramic Capacitors (MLCCs) have subsided a littlDSC05362e, 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.

 

The Tariff Situation and PCB Sourcing

DSC05355As we write this, the tariff situation seems to be improving. The 25% jump in tariffs planned for January has been postponed 90 days, pending the result of ongoing negotiations with China. That said, there is a 10% tariff on printed circuit boards (PCBs) fabricated in China. Even with the 10% tariff, in many cases, China remains the most competitive option. Should the tariffs jump to 25%, that would no longer be the case. The team at Burton Industries is in the process of qualifying Taiwanese PCB options to ensure our customers have a range of cost competitive options.

Burton Industries Q4 2018 Newsletter

Our latest newsletter looks at equipment additions, migration to the ISO 9001:2015 quality standard, our 40th anniversary open house and our annual food drive. View Burton Industries Q4 2018 Newsletter here.

Burton Newsletter Q4 2018

August 2018 Supply Chain Trends

We continue to see lead-times stretching out across a number of components. InAugust Trending Info general ceramic capacitors, we see allocation at many suppliers, increasing lead-times and price increases. In fixed resistors, RoHM is not accepting orders, PSC is heavily constrained and has 52+ week lead-times. At other manufacturers we are seeing lead-times range from 8-30 weeks. Tantalum capacitor lead-times have increased from 15 to 28 weeks. In MLCCs, Murata and TDK are on allocation. Lead-times in general are running 12-30 weeks. Automotive components are the most heavily affected. STMicro is increasing lead-times across the board on all their products. We’ve included a color-coded chart highlighting trends in all commodities as of end of August 2018.

Burton Industries’ customers can contact their CSR and request a current spreadsheet outlining these trends by component type and manufacturer.

Tariff Mitigation Case Study

 

DSC05352The first round of tariffs have kicked in on components originating in China. Our distribution partners are tracking this and billing the tariffs at the end of the month. We are auditing their charges against our records and are passing along these costs to customers.

We are also working to mitigate tariffs wherever possible. The software tools we have are helpful in identifying country of our origin and alternate sources. We are also identifying suppliers & quoting current custom parts not in China. Here is our most recent cost reduction example:

Tariff Mitigation Case Study

Recently a customer wishing to mitigate China-related tariffs asked us look at alternate suppliers. We were able to identify another Asian source outside of China. The end result was the part cost was reduced from 23 cents to 16 cents, which represented nearly a $35,000 annualized savings in addition to eliminating the tariff cost.

Addressing Materials Constraints

_FBP5218-2The team at Burton Industries recognizes a constrained market requires that we work as closely as possible with our customers and suppliers to keep products on schedule. We are tracking distribution partner performance. Those who are living up to commitments the majority of the time and being proactive in communicating impending issues are seeing the bulk of our spend.

We have a number of supply chain partners willing to carry bonded inventory for us and live up to their commitments. Bonded inventory gives customers maximum flexibility with minimum liability, because the majority of parts are in high demand and easy to restock should a forecast change. Where possible we are moving customers to these sources of bonded inventory, setting demand based on a 12-month forecast.

We are working to get all our volume production customers to give 26+ weeks of commitments based on component lead-times. We modify that expectation for customers with legacy products that are built on an as needed or a few times a year basis.

Here are a few tips to further mitigate component availability issues:

  • Put our design team in the design cycle from a Bill of Materials (BOM) standpoint as early as possible. We offer a free BOM scrub service to existing customers to help them assess risk in critical to design components.
  • Avoid single source parts or those with limited sources.
  • If a part has been labelled not recommended for new product use, it should also be avoided as its obsolescence risk is high.

Burton Industries’ Design Engineering team can help with all your component engineering related needs. Our pool of specialists can help you manage the increasingly complex development environments and offer full life cycle management with strong focus on cost savings and defect prevention. Capabilities include:

  • Product/PCB Design
  • PWB layout
  • Design for manufacturability (DFM)
  • Component selection assistance (alternative sourcing)
  • Development of manufacturing aids (fixtures, stencils, etc.)
  • RoHS conversion assistance
  • Product Lifecycle Management (PLM) recommendations

 

Reducing Risk of Field Failures: Benefits of Conformal Coating and Potting

By Jeff Brattrud, Burton Industries’ Engineering Manager

Anyone who has spilled a cup of coffee on a keyboard or dropped a cell phone in water understDSC05352ands the negative effects that moisture can have on the operation of electronic products. Products used in harsh environments with regular exposure to temperature extremes, water, humidity, sand or salt spray can also have performance issues. One way to mitigate that risk is to either coat or encapsulate all or part of the printed circuit board assembly (PCBA).

Conformal coating is the most widely used method and acrylics are among the most popular conformal coating material. Acrylics are easy to apply and easy to rework. Silicone is also popular. However, it is harder to remove for rework. Rework on silicone-coated PCBAs requires use of solvents unless only a small area of the product will undergo rework. The main advantage of silicone is that it is stable at higher temperatures up to 200 degrees C, which makes it appropriate for high heat applications. The team at Burton Industries uses a one-part silicone formula. Both acrylics and silicone provide good protection from moisture, fungus, dirt, dust and salt spray. Silicone provides better protection in environments that include chemicals or solvents and vibration.

Potting provides additional protection in harsh environments by encapsulating sensitive electronics. When used on a single component in a process known as “glob top,” it can protect ICs from damage or strain. Some companies use potting compounds as a means to prevent theft of proprietary data. Potting may be a better solution than conformal coating for protecting products in environments that have a lot of vibration because it provides total encapsulation. It can also help with heat dissipation, since encapsulation spreads heat more evenly. Other harsh environmental conditions it can protect against include chemical or gas exposure, shock and drops.

In selecting an appropriate potting compound, it is important to consider environmental factors and potential component stress issues. For example, a softer compound will put less stress on components, particularly when there are temperature extremes.

Both potting and conformal coating add cost to the product, although prevention of field failures can eliminate a much higher cost. Once a product is potted, it generally can’t be reworked. Products incorporating potting must either be designed with an enclosure that won’t allow seepage during cure or a mold must be made to hold the compound during cure. Curing time with potting can be longer than that of conformal coating and the curing process requires control, since heat and humidity can affect cure time.

Both coating and potting require a clean substrate for the coating or potting to adhere properly. When no clean flux is used, it must be tested to determine if an additional step is required to clean the substrate prior to coating or potting. Use of non-wettable components will add cost. At a minimum they need to be masked or protected with a fixture if dipping or spraying is used. Thickness of the coating must be controlled to stay within the design specification including the thickness tolerance.

Conformal coating and potting offer viable options for protecting products from harsh environmental conditions. The team at Burton Industries is experienced with a wide range of options and can help with both the design and selection process.