With the passage of time and the continuous advancement of technology, the use of electronic components will only become more common. Even if a company doesn't think of itself as a technology company, it may become one in the near future. In the automotive industry, for example, the car used to be a mechanical product and is now more and more like a "computer on four wheels." The demand from the automotive industry is impacting component suppliers' production, which in turn is changing the way Oems (original equipment manufacturers) manage procurement and scrap.
According to the International Energy Agency's (IEA) Global Electric Vehicle Outlook 2023 report, more than 10 million electric vehicles will be sold globally by the end of 2022. About 14 percent of cars sold worldwide are electric, compared with 9 percent in 2021 and less than 5 percent in 2020. In addition, the report predicts that 14 million electric vehicles will be sold worldwide in 2023, a 35% increase in sales year-on-year. Not only are sales of electric vehicles growing rapidly, but the number of chips consumed per vehicle is also surging, such as the Ford Mustang Mach-E, which uses nearly 3,000 chips, illustrating the automotive market's huge demand for semiconductors worldwide.
As semiconductor manufacturers scramble to provide new technologies for high-demand markets and suppliers shift their product portfolios to capture new business, other industries may need to go back to the drawing board to find suitable components. For example, networking and communication devices, consumer electronics are all key applications for semiconductors, and each application places different requirements on semiconductor devices. At the same time, vertical markets such as industrial, medical, aerospace, and defense require long-term procurement of components, and engineers tend to use proven devices, which makes some parts in the new design stage, is already in the mature stage of the life cycle or toward retirement.
In these issues, the role of distributors is critical, especially for parts that have reached EOL(project termination or shutdown) and face the challenge of obsolescence. The increasing demand for semiconductor devices will accelerate the phase-out of devices of specific specifications.
So far, the elimination rate of semiconductor devices has increased by 30%. In practice, this could reduce the life of a particular component from 10 years to seven years. As semiconductor manufacturers stop producing older components and pursue the production of higher-margin components, the role of distributors will fill the gap and extend the availability and life of mature devices. For Oems, choosing the right partner ensures the continuity of their supply chain:
1. Work with suppliers to understand where a particular component is in its life cycle and proactively anticipate demand before its life cycle ends.
2, through active cooperation with customers, to understand the future needs of specific products. Often, Oems tend to underestimate future demand.
In the future, every company will be a technology company, and having a dedicated partner focused on solving the problem of obsoleted components is critical.
Post time: Aug-02-2023