Parts Shortages Continue Wreaking Havoc With Product Design

Shortages of electronics parts brought by a combination of the global COVID-19 pandemic and ongoing economic and geopolitical turmoil is taking their toll on design engineers, who have been forced to extend design cycles, resort to alternative means to procure parts, and pay mounting prices, according to a recent survey by electronics distributor Avnet.

The crisis is threatening to outlast the COVID-19 pandemic and is presenting a significant challenge to more than 75 percent of the 530 engineers, who are Avnet customers, that the company surveyed. The dismal findings paint a gloomy picture for the global electronics industry, which is trying to keep with robust demand for its products as electronics content continues to increase in automobiles, industrial systems, medical products, and other sectors.

Even industry veterans such as Peggy Carrieres, Vice President of Global Sales Enablement and Supplier Development at Avnet, are perplexed by the length and depth of the crisis.

“This is a cyclical business as it is,” Carrieres told Design News in an interview last week. “We were ready for an uptick in 2020 with 5G coming online and autonomous vehicles growing. We’re seeing more disruption as demand increases and supply constraints continue.”

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Carrieres noted that when the pandemic hit, automotive demand initially slowed but was replaced by demand for parts in medical products such as ventilators, as well as PCs as remote working caused demand for computer parts to surge. The pent-up demand for parts is forcing design engineers to readjust design cycles and in many cases modify part designs.

According to the survey, 93 percent of the respondents said they were witnessing longer lead times for parts, with the situation likely to worsen. To add insult to injury, part prices also continue to rise, led by microcontrollers which have seen increases exceeding 35 percent. Logic and programmable parts have seen price increases averaging greater than 20 percent.

Microcontroller misery

Microcontrollers have been hit particularly hard by shortages, according to the survey, as lead times have in many cases stretched to 50 weeks or more. Microcontroller shortages are compounding another issue as engineers have to switch to an alternative part because the desired part is not available. Avnet’s Carrieres noted that microcontrollers present challenges to engineers because they cannot just be dropped into a board design without additional hardware and software changes, unlike less complex parts such as passives.

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The survey noted that 55 percent of respondents said they had to redesign boards. Another 35 percent had to make firmware changes and 25 percent software changes. As a result, 40 percent of the respondents reported a major impact on design cycles.

Design cycles are lengthening because engineers now must spend more time sourcing parts from multiple sources, which is siphoning time from engineering work. Moreover, the use of alternative parts is forcing engineers to spend additional time in testing, approvals, and certifications. On top of that, many respondents have had to modify the performance and functionality of the final product.

Materials shortages

Increasing part production to alleviate shortages is not as easy as it sounds. Materials shortages, coupled with shipping and logistics challenges, are contributing to parts shortages as the wafers used as the basis for many parts are too in short supply.

“The front-end processing used to make wafers can now take anywhere from 8 to 14 weeks,” Carrieres said. “There is no longer buffer inventory of wafers to cut parts from.”  

Recent initiatives to increase domestic semiconductor production, such as Intel building two new fabs in Ohio, will be a help, Carrieres added, but those efforts will not solve the current crisis. “It can take up to three years to get a wafer fab online,” she noted.         

Carrieres believes that while parts shortages will eventually lessen as more production comes online, any semblance of a normal business environment where demand and supply are in balance is at least a year away.