The growing challenge of automotive semiconductor obsolescence

This article originally appeared in the Feb'23 magazine issue of Electronic Specifier Design – see ES's Magazine Archives for more featured publications.

The adoption of electronic interfaces for many core automotive systems, along with the integration of driving aids and entertainment systems, as well as the market’s rush-to-electric, means that semiconductors now represent an increasing part of the overall material purchase.

However, the automotive industry’s need for long-term semiconductor availability to not only cover development and production phases but also 10 to 15 years of after-sales support, sits at odds with ever-shortening semiconductor lifecycles. Ken Greenwood, Technical Sales Manager, Rochester Electronics further explores.

What drives semiconductor obsolescence?

Over the last nearly three years, the demand for automotive semiconductors far outstripped supply. During these periods, every part of the supply chain re-assesses its product priorities, focusing on the most profitable and discontinuing the least. Even before this latest allocation period, overall semiconductor product discontinuations rose by 19% in 2020. Here are some of the main factors driving this accelerating trend:

Wafer Fabs - Semiconductor manufacturers and, critically, the third-party fab houses behind many of them, re-assess their technology and component roadmaps regularly, pruning older lines and investing in new ones. Over the last two years, third-party fab houses have closed 110nm, 90nm, and 45nm processes, with other wafer technology closures on the horizon. The closure of a fab typically means the obsolescence of every semiconductor manufactured there. Product porting, to another fab, is now very rare.

Packaging - In parallel, the packaging houses, both those owned by the semiconductor manufacturers and independent third parties, are re-assessing the economics of many semiconductor package styles. Older lead-frame-based packages such as PLCC, smaller SOIC, and QFPs have more complicated supply chains. Expect to see obsolescence acceleration across all old package styles.

Additional costs – Tester platform support is finite from the original manufacturers. Eventually, spares and software support become too costly. Whilst converting test processes to a new platform is possible, few equipment manufacturers would justify it.

Predicting semiconductor obsolescence, especially when those decisions are taken within the IC manufacturing supply chain itself, has become increasingly difficult. Traditional lifecycle algorithms struggle to anticipate and function in this paradigm.

What are the consequences of semiconductor obsolescence?

The danger of increasing semiconductor discontinuations means:

• More working capital tied up in last-time-buy (LTB) stocks
• More obsolescence-driven redesigns taking engineering resources away from new product designs

With perfect market forecasts and ideal storage conditions, the extra costs of LTB component stocks are unwelcome but manageable. However, changes in demand and delayed redesigns are more likely to result in component shortages or surpluses at the end of the programme.

The process of requalifying automotive systems is onerous, particularly around safety-critical applications. Obsolescence-driven redesigns, which add no additional functionality are only to be considered as a last resort.

Automotive customers find themselves having to manage the twin threats of:

• Semiconductor life-cycle uncertainty
• Increasing component discontinuations and shorter component lifecycles

What can automotive customers do to reduce these costs?

It is vital to know the impact of semiconductor discontinuations. Black box sourcing through a tiered supply chain means that automotive manufacturers have become divorced from the components. A full critical-parts list covering the whole platform is an essential first step.

With this starting point, component lifecycles can be tracked, so that early proactive support can be given. Algorithm-based predictions have a role to play but planning for supply uncertainty should now be part of every process. Authorised shortage and aftermarket suppliers such as Rochester Electronics, can provide additional invaluable market trend data as well as a risk-free source of active and obsolete semiconductors.

To provide a more proactive approach with guaranteed security of supply, Rochester Electronics is committed to an authorised purchase and transfer of semiconductor wafer and IP after discontinuation. Customers affected by discontinuations and who share their critical parts lists can impact this investment strategy and secure themselves future supply options.

Long-term wafer storage followed by production provides the most economic and flexible long-term support. Customers require a production process that adheres to standards such as IATF-16949- for quality management systems, and ISO-14001 for environmental management. Performance mirrors the original component specification exactly.