Every company that relies on a supply of electronic components has to manage component obsolescence: the inevitable day when the original manufacturer sets a date for end of life, that is, for production to cease.  Here’s why it happens.

Technological Advances

Components manufacturers must adapt and evolve constantly to survive.  If they do not, their competitors will take all their customers.  They are looking to improve all their components, all of the time. As soon as an advance offering a market is found, the new component replaces the old one.

Market Demand

When the real, or forecast demand for a component drops below the level required for profitability the manufacturers will announce it’s end of life.  It may not be obsolete technologically, but manufacturers cannot afford to waste production capacity and logistics capacity on loss-making components.

Manufacturing Constraints

As production processes evolve, maintaining the capability to produce older components becomes increasingly challenging and cost-prohibitive. Semiconductor fabrication plants, for instance, upgrade their facilities to use the latest technology, making it difficult to continue producing older generations of components. The cost of maintaining outdated equipment and processes often outweighs the benefits, leading to the phase-out of older components.

Regulatory Changes

Regulatory changes also drive obsolescence. Environmental regulations, such as the Restriction of Hazardous Substances (RoHS) directive, impose strict standards on the materials and chemicals used in electronic components. Components that do not comply with new regulations are quickly rendered obsolete.

Supplier Decisions

Decisions made by component manufacturers, and events happening to them, may trigger component obsolescence. Mergers and acquisitions can lead to one company producing 2 very similar products. Rather than compete against itself, the less profitable product is made obsolete. Strategic decisions, such as exiting a specific market segment, also trigger obsolescence.

Our Role

Some of these triggers can be predicted, and some cannot. Some shortages can be avoided by good supply chain management and forward planning, and some cannot. For all the component shortages that cannot be foreseen, we can help. Here’s why we think we are the best solution to your component obsolescence problems.