Power management IC shortage holding cars, laptops, hostage

The shortage of power management chips is worsening and holding back companies from building cars, PCs and items with batteries or an on-off switch, Trendforce said in a study this week. Power management ICs cost just a few cents, and are among cheap chips that include display driver and USB-C components that are in short …

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We're getting replies from suppliers saying that the analogue amplifier and digital chips that we use will be back ordered until Oct 2022. We've "solved" some of the issues by buying the military grade versions of the chips so that a board that cost us about $45 to build earlier this year, will cost us about $135 next year.

[Anonymous Coward]

Have I got a deal for you...

Are you looking for anything in particular?

Asking for a friend, obvs.

Back when I was on the fringes of a few chip-dependent businesses, sensible companies wouldn't base any designs on anything that wasn't available from multiple independent sources. Presumably bean counters decided things like that cost too much. Maybe they'd now like to apologise?

In fact wasn't second sourcing the main reason for the existence of AMD at one time?

[elaar]

Re: Have I got a deal for you...

That does sound like a crazy way to run a business.

I work for a company that designs and manufactures test instruments (oscilloscopes, amplifiers etc..), and everything is now designed in a much more modular way, multiple revisions of pcbs etc.. A board can easily be designed to take a number of different ICs with slight modification.

I'm sure we'd go out of business instantly if the cost of producing our boards went up 300%.

[Brewster's Angle Grinder]

Re: Have I got a deal for you...

"I'm sure we'd go out of business instantly if the cost of producing our boards went up 300%."

Unless everybody else has stopped supplying the product or put their own prices up by 300%. It depends how price sensitive the demand is; clearly not everybody would be willing to pay the new price but then supplies are reduced.

[shd]

Re: Have I got a deal for you...

Genuine second sourcing is quite unusual nowadays, as far as I can tell. Often a de facto second source happens because a second manufacturer produces a nominally compatible device with the same pinout - for varying degrees of 'compatible'. Or the copy has additional useful features, which then mean the original can't replace it.

Some manufacturers don't even pay attention to backward compatibility within their own ranges. I've got one chip (ordered April this year, now due October 2022) where the same manufacturer has a number of suitable alternatives (apart from all of them also being on long lead times) - all have different pinouts.

[Boothy]

Re: Have I got a deal for you...

I worked at an engineering firm back in the 90s, and we designed and built a lot of our own electronics.

I remember one board we designed, some sort of power regulator if I remember correctly, One of the silicon components was quite pricy, we knew there was some alternates, so the company just bought whatever was the cheapest at the time. Issue was, whilst the silicon package was basically identical, a couple of the pins were reversed between manufactures.

So the guy who designed the board, which was a double sided PCB with plated through holes, designed it with the two pins that alternated, with bridging tracks via the plated through holes.

Use silicon with layout 'A', drill out the two holes marked 'A', fit 'B', drill out the holes marked 'B'. We had an extra QA step to make sure that the two holes had been drilled, and that it was the correct ones! (Otherwise BANG when tested!).

[Electronics'R'Us]

Margins

The automotive sector has pretty thin profit margins, so shaving even a penny off the bill of materials can positively impact the bottom line. The opposite is also true - an increase in cost of 2 cents (per the article) is a huge blow to the automotive market.

In this sense, the device shortages are due to being victims of their own success because all the high volume markets use the parts that are a few cents. Other markets use parts that are not as cheap (safety critical and high reliability come to mind) and are on fairly reasonable lead times.

Then there is the manufacturer attitudes; Maxim integrated, although a bit better now, used to do a run of several hundred thousand of a given part (or even millions in some cases) for their large customers and if there were any left over the smaller outfits could get them. For that reason smaller companies tend to not use them (Maxim supplies a lot of PMIC devices).

Then there are pinouts; although there are pretty standard footprints and pinouts for some common devices (op amps in particular*) when it comes to the PMIC market that just is not true.

Fabrication plants are across the globe. There are fabs for US based companies in the Philippines and Singapore, for instance to say nothing of Vietnam and others. With the costs of shipping going through the roof that makes things more difficult just from a shipping cost perspective.

* That doesn't mean you can just drop in another device because there are literally dozens of parameters and they are all (in one way or another) subtly or even obviously, different.

[tiggity]

JIT

Just in time and similar lean (low inventory) production methods are great ... until things go wrong.

Its always a trade off, keep a big inventory and have a degree of resilience if supply issues strike (but the downside is the the associated storage costs, some kit may be out of date (not much of an issue for PMIC, but if you are e.g. a PC maker you probably don't want a big stock of old CPUs as you will be wanting to sell the latest & greatest CPUs)).

Go lean and you save on the costs of a big inventory, but at the cost of a fragile supply chain, and inability to deal with a big spike in demand for a product as you don't keep much finished product in storage.. Not that it looks fragile in normal circumstances, but its relatively easily broken by "unexpected"* events.

.. and it ripples on as most retailers do lean also, as nicely shown by the massive shortage of webcams, laptops, headsets etc. (and thus big price surges) when COVID induced WFH caused a spike in demand for those items.

* Not unexpected, just that too many potential problems get brushed under the carpet, especially with management mindsets that see any flagging of potential gotchas as being " negative, not showing a can do attitude etc."

[Nonymous Crowd Nerd]

Re: JIT

Exactly. Almost everything I learned on my MBA regarding managing the supply chain is being proved wrong. The whole philosophy of off-loading risk onto the supplier and doing nothing in house is exactly what is backfiring now.

[Kev99]

This is what happens when Wall Street controls the actions of companies instead of the market. The "experts" on Wall Street want their precious dividend more than allowing the companies to make products for the market. And how shipping the parts across the ocean over six-eight weeks surrounded by highly corrosive salt air can really be more efficient and less expensive is beyond me.