Trump announced countries that had not retaliated against US tariffs would receive a 90-day reprieve and only face a blanket tariff of 10%. But he hiked the tariff on Chinese imports to 125% from the previous 104%.

In an extraordinary U-turn after days of claiming that his sweeping worldwide tariffs were here to stay, US President Donald Trump shelved plans to hike tariffs on most countries, pulling back from days of market mayhem and a potential global trade war amid warnings of dire consequences for the US economy. 

But Trump doubled down on his trade war with one country — China — escalating America’s economic confrontation with the world’s second-largest economy by slapping further tariffs on Beijing that have now cumulatively risen to a whopping 125%.

As for the rest of the world, Trump announced countries that had not retaliated against US tariffs would receive a 90-day reprieve and only face a blanket US tariff of 10%.  

According to reporting by CNN and The New York Times, the turmoil in the bond market convinced the US president to make this stunning reversal after insisting days earlier that his policies would never change. 

“The bond market is very tricky, I was watching it,” Trump said, after his latest announcement, seemingly indicating that the troubling surge in US government bond yields was playing on his mind. “The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy.”

Trump’s turnabout came after the most dramatic episode of financial market volatility the world has seen since the onset of the COVID-19 pandemic, erasing trillions of dollars from stock markets.  

But the US president has refused to ease the pressure on China, saying he would hike the tariff on Chinese imports to 125% from the previous 104% level, after China announced additional retaliatory tariffs against the US of its own. The two countries have slapped higher and higher tariff hikes against each other in a tit-for-tat since Trump first imposed wide-ranging tariffs against most countries, including China, on April 2.

“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump wrote in a social media post.

Meanwhile, the head of the World Trade Organization, Ngozi Okonjo-Iweala, has warned that the trade war between the US and China “could severely damage the global economic outlook” and trigger “potential fragmentation of global trade along geopolitical lines.”

Orignal Article: https://evertiq.com/news/2025-04-10-trump-reverses-tariff-hikes-for-most-countries-except-china

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Though many anticipate chip inventory rebalancing and normalisation come early 2025, the chip supply chain will continue to face challenges and constraints. Infrastructure costs, geopolitical events, increased vulnerability to natural disasters, and both natural resource and talent shortages will all contribute to ongoing challenges, even as semiconductor supply normalises.

The widespread adoption of artificial intelligence (AI) and hyper-scale cloud computing is driving much of the surge in chip demand and has also led to shifting fabrication plant (fab) priorities, which will impact sourcing for certain components in 2025 and beyond.

Though some elements of market recovery are worth celebrating, buyers should remain cautious and proactively prepare for recovery while developing strategies that help minimise risk.

Factors Driving Market Normalization

The semiconductor market should ease into more balanced, predictable supply behavior in early 2025. This will be due to the following factors:

• “Take or Pay” contractual agreements terminating
• Better supply visibility by early 2025
• Surety of product manufacturing
• An improved economic situation, with better capital flow and moderating interest rates
• Semiconductor market growth opportunities related to AI hyper-scaling and high-end cloud computing demand

In 2025 and beyond, the AI, cloud and embedded space is expected to have above-average growth driven by high underlying demand for edge computing, data centers, networking and infrastructure equipment, and the continued proliferation of IoT products. Top semiconductor manufacturers, including TSMC, have seen a consistent increase in demand for semiconductors due to the boom in demand for AI products specifically. The demand in this space will continue — and likely grow — for the next several years at a minimum.

Chip Capacity Constraints

Market recovery does not mean the end of semiconductor shortages. While semiconductor industry insiders now begin to see a normalization of the chip supply chain and anticipate a full normalization come early 2025, this new “normal” will evolve into rolling periods of constraint environments for certain node sizes. 

Semiconductor supply constraints will be exacerbated by fab delays. New fab construction has been continually delayed in the U.S. Many of the fabs that started construction in 2021 and 2022 have been delayed due to a decrease in overall consumer demand, geopolitical events, and high development equipment costs. In the past year, TSMC reported multiple delays to its $40 billion facility in Arizona. The company announced last month that it would receive up to $6.6 billion in CHIPS Act funding to expand the site, but factories likely won’t be operational until 2028.

Given the market fluctuations and uncertainty, semiconductor buyers remain concerned about long-term supply. In order to protect against future disruptions, companies are turning to inventory prepayments to secure required components for their end products. For example, Micron announced it received $600 million in customer prepayments during fiscal Q1 2024 alone. In December 2023, AI leader NVIDIA made a total of $775 million in upfront payments to multiple chipmakers to secure cutting-edge high-bandwidth memories. 

Of course, prepayments can place significant financial strain and pressure on organizations. Most companies will not be able to prepay for all necessary chips. To protect balance sheets, prepayments are best made on components that are in the highest demand.

Node-Size-Specific Supply and Demand Considerations

After next year’s inventory rebalancing, wafer supply across most semiconductor manufacturing node sizes is expected to be outpaced by demand through 2027. Buyers should work to understand how supply for the chips they need for their end products will be affected by market shifts.

Next Generation, Sub-11nm: Next-generation chips (components smaller than 11nm) power high-growth advanced technologies such as AI and high-end cloud computing. New fabs will continue to prioritize next-generation chip investments as AI and markets grow. Sub-11 nodes remain the most profitable, which limits the number of companies willing to invest in the larger node sizes.

Mature Nodes, Greater Than 28nm: The automotive sector typically uses chips with mature nodes greater than 28nm. Supply may soon be trending in a positive direction for mature nodes. In the midst of a slowdown in consumer demand for electric vehicles (EVs), electric car companies have ramped up production of partial hybrid vehicles. Partial hybrids require fewer chips than pure EVs and some different types of components.

As auto manufacturers de-emphasize pure electric vehicles in favor of PHEVs, it will free up semiconductor supply for those remaining in the market. Specifically, there will be increased availability of chips with mature nodes greater than 28nm.

Legacy Components, >=65nm: As fabs move away from producing legacy components and larger node sizes, OEMs will find it increasingly challenging to source legacy parts through manufacturers and traditional distribution networks despite global CHIPS Acts.The most significant supply/demand imbalance will be in the >=65nm node size, where OMDs (original design manufacturers) are best positioned to fill gaps in supply.

After the inventory correction in 2025, supply and demand imbalances for legacy and current-gen components are expected to continue as there is limited new supply expected, despite a consistent demand outlook.

Building A Resilient Supply Chain

Market recovery may be on the horizon in early 2025, but it won’t be smooth sailing from there. To be best positioned to fulfill future demand, OEMs must build robust, resilient supply chain strategies now.

Here are three strategies that OEMs can employ to mitigate risks and prepare for potential constraints:

1. Building a supplier network: Supply chains are more interconnected than ever. Building a network of resilient suppliers (globally and close to base) gives OEMs options when shortages arise and lowers the risk of disruption if an unexpected event occurs where the bulk of their components are produced.
2. Be proactive: Being proactive by recognizing supply chain disruptions and adapting quickly, rather than waiting for issues to build, is critical to a resilient supply chain strategy.
3. Leveraging advanced analytics: Choosing reliable, up-to-date sources for market forecast information and consulting with multiple players in the industry—partners, suppliers, customers, and even competitors—helps OEMs gain a holistic approach and keeps them ahead of the curve.

By keeping a finger on the pulse of market shifts, adapting strategies when necessary, and preparing for constraints proactively, buyers can take on challenges that may arise after the market normalises.

Original source August 31, 2024 by Frank Cavallaro from A2 Global Electronics

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While China is in the lead for critical minerals production, the nation is losing its dominance. For example, the United States and Australia have increased their production of rare earths from 2010 onwards and most recently, Myanmar and Thailand have started to mine far more than before. Global production of cobalt, graphite and lithium set to increase nearly six-fold between now and 2050 (World Bank).

Originally created by By David Manners Posted on 2nd August 2024 | Modified on 2nd August 2024.

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Key segments of the EU’s electronics manufacturing industry are set to decline – undermining Europe’s security, industrial resiliency, and global competitiveness.

A recent analysis by IPC reveals Europe’s increasing reliance on foreign regions for electronics manufacturing in critical and strategic sectors such as aerospace and defence. Even with the adoption of the European Chips Act, the report – Securing EU’s Electronics Ecosystem – shows that the EU’s market share in critical electronics components other than chips, such as PCBs, electronic manufacturing services EMS, and advanced packaging, will fall to 15% by 2035. Evertiq has previously reported on the challenging situation the European industry is facing – especially the PCB industry.

Over the previous two decades, the PCB industry in Europe has seen a severe decline, one could even call it an erosion. In passing the Chips Act, the EU made a strategic, but narrowly crafted commitment to the electronics industry – but rebuilding a robust and sustainable European electronics ecosystem requires revitalising and expanding electronics production beyond chips.

According to the IPC, a “silicon to systems” strategy is required – even necessary – to support ongoing EU technological leadership and achieve strategic objectives.

As previously reported, US and European PCB manufacturers have been outcompeted and outpaced over the last couple of decades by Asian PCB manufacturers. In 2000, Europe’s domestic PCB manufacturing accounted for 16% of the global total; by 2022, this figure had dropped to 2.3%. Back in 2000, Europe had 555 PCB manufacturers, in 2015 this number had been reduced to 247 – in 2021 it had dropped to 171.

Given the current trajectory of the European PCB industry, Evertiq has invited Alun Morgan, President of EIPC, to participate as a keynote speaker at the Evertiq Expo in Berlin, Germany on June 20, 2024, to talk about the dire situation that the industry faces.

IPC’s investigative report examines just how reliant Europe is on non-EU manufacturing in eight strategic sectors including aerospace/defence, automation, mobility, healthcare, and renewable energy – and the picture it portrays is far from pleasant.

According to the IPC research, for each of these eight strategic sectors, several similar storylines emerge. First, without strategic initiatives and policies, the EU’s total share of electronics systems manufacturing is expected to drop by 2035. Second, the EU continues to rely heavily on overseas suppliers for critical inputs and processes such as PCBs, advanced packaging, and IC substrates. Third, without intentional and strategic interventions, these dependencies are bound to intensify by 2035.

According to the IPC’s data, the EU’s share of the global PCB industry is 2.8% as of 2024, and by 2035, the IPC projects it to be 1.7% – assuming nothing is done to slow current development.

A comparable scenario for electronics system manufacturing and assembly (OEM/ODM/EMS) may be drawn. The EU now has a 16.6% global share, but as previously indicated, if nothing changes, the IPC predicts this proportion will be 15% in 2035.

The study’s findings echo growing calls for strategic investments and broad policies to boost the EU’s competitiveness. If the EU truly wants to “reduce its strategic dependencies in sensitive sectors” it needs to look beyond chips.

The industry now calls for action, global PCB production has more than doubled since 2000 with European demand today at an estimated EUR 7.87 billion – while at the same time, the PCB production in the EU is valued at roughly USD 2 billion, or around 2% of global production.

The IPC states that despite soaring demand for PCBs, European PCB production is projected to satisfy only 11% of European demand for PCBs – down from 17.5% today.

The answer, according to the IPC, is a Strategic Electronics Manufacturing Act (SEMA), building on the model of the European Chips Act and broadening the approach to include the full electronics manufacturing value chain.

As mentioned earlier, Evertiq has invited Alun Morgan, President of EIPC, to participate as a keynote speaker at the Evertiq Expo in Berlin, Germany on June 20, 2024, to shine the spotlight on the European PCB industry.

Additionally, Evertiq has assembled industry professionals for a panel discussion where we will delve deeper into the challenges and opportunities of the European electronics industry. The aim is not only to discuss critical topics but also to share insights and solutions that can help the industry as a whole thrive in this dynamic environment. By fostering a collaborative dialogue, we hope to inspire innovation, resilience, and a shared vision for the future of the European electronics industry.

Editor: Dennis Dahlgren.
Original Article: https://evertiq.com/news/55877

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RECORD 2023 GROWTH FOR EUROPEAN EMS MARKET

In this article, IPC Electronics Europe presents purchasing professionals with the key takeaways from in4ma’s Annual Survey of the European EMS Industry 2024.

As revealed by an annual survey conducted by in4ma and sponsored by IPC Electronics Europe, the European electronics manufacturing services (EMS) industry experienced a robust 11 percent growth last year.

Printed circuit board assembly (PCBA) production by EMS companies achieved record revenues of 57.3 billion Euros in 2023, underscoring electronics manufacturing’s vital role in the European economy and industrial base.

The survey’s lead architect and in4ma’s founder and president, Dieter Weiss, stated that 306 legal entities contributed data to this year’s survey, which represented a 50 per cent expansion in participants in just three years.

Key year-over-year industry takeaways from the survey data included:

• Eighty-one percent of EMS companies had higher revenues than the previous year
• Employment in the EMS industry increased by approximately 14,000 to just over 254,000 total, which represented employment growth of 5.9 per cent
• EMS production of PCBAs represented only 43 per cent of the total market of European PCBA production in Europe, so long-term growth potential still exists
• The market remained very top heavy: Less than four percent of the total EMS companies in Europe represented over 70 per cent of revenue
• Excessive raw materials in inventory were calculated to be 5.2 billion Euros
• Market consolidation will continue in 2024 as witnessed by 12 merger and acquisition (M&A) deals completed just in the first two months of the new year
• Overall prognosis for 2024 is that the European EMS market could contract by up to one percent

The full report titled Annual Survey of the European EMS Industry 2024 authored by Dieter Weiss and Mareike Haass can be purchased directly from in4ma.

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Gen AI sparks IC boom, says Yole

Datacentre GPU and AI ASIC revenue could reach $156 billion by 2025 and $233 billion by 2029, says Yole Developpement.

The massive growth that the data center GPU and AI ASIC market experienced in 2023 is expected to continue in 2024 before stabilising in 2025.

Generative AI’s rise since late 2022 has boosted demand for high-speed memory technologies, including DDR5 DRAM, GDDR6 DRAM, etc., as well as HBM .

Thanks to strong momentum in GPUs and ASICs for AI computing, the HBM market is booming. Bit shipments are expected to keep growing vigorously in the next five years, with a 48% CAGR between 2023 and 2029.

Generative AI’s explosion also impacts the packaging market segment: according to Yole, it will grow to $333 million in 2029.

Datacenter processor shipments for AI acceleration were growing strongly in 2023, and this trend is expected to continue in 2024 and 2025. Yole expects the datacenter GPU market to grow to $162 billion in 2029, representing an almost 26% CAGR between 2023 and 2029.

Among these datacenter GPUs, the flagship segment with GPUs such as Nvidia H100, B100, and AMD MI300, which are mainly used for generative AI training and inferences, is expected to grow.

AI ASICs are also growing strongly to a $ 71 billion market in 2029, representing a 35% CAGR.

“The decision to investigate the effect of AI in depth was triggered by the unprecedented investment from major hyperscalers in GPU and AI ASIC, which far exceeded our initial projections,” says Yole’s Emilie Jolivet, “this surge in investment was reflected in the remarkable revenue growth, with 2023 figures more than double those of 2022. At Yole Group, we anticipate a comparable growth rate for 2024, indicating a potential sustained trend that is likely to continue to reshape the industry.”

The impact of this trend extends beyond the financial aspects, significantly influencing the semiconductor supply chain. The increased demand for advanced chipsets optimised for AI workloads is impacting the existing supply chain, leading to potential bottlenecks and shortages.

Moreover, the shift towards AI-specific hardware is driving a need for new manufacturing processes and technologies, further challenging the industry.

Nvidia is the frontrunner in the generative AI market, propelled by its flagship GPUs and experiencing substantial growth in its datacenter business line.

Meanwhile, AMD’s MI300 is gaining traction in the field. Major players like Google, Amazon, and Chinese BATX are forging ahead with the development of AI ASICs tailored as custom chips for internal use and cloud services. Their goal is to lessen dependence on datacenter GPUs from fabless companies, reduce costs, and harness processors designed specifically for their requirements.

This emergence of AI ASICs presents significant competition for Nvidia. Intel’s Gaudi and several startups with varied approaches are also entering the market.

“Samsung, SK hynix, and Micron are expanding their wafer capacity for HBM production to capitalise on opportunities in the AI market,” says Yole’s Adrien Sanchez, “while SK hynix currently leads the HBM market, competition is intensifying with Samsung’s involvement.”

In the advanced packaging field, Intel, Samsung, and TSMC are at the forefront of innovation in the high-end packaging market.

Despite challenges faced by IC substrate makers, optimism stems from recent investments, capacity expansions, and advancements in glass core substrate technologies.

The post GEN AI SPARKS IC BOOM / DEMAND FOR HIGH-SPEED MEMORY appeared first on Connect Electronics.

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Semiconductor Lead Times Drop and Passives Rise

Can you believe we’ve already made it through the first half of the fiscal year? Time flies when you’re having fun. The summer sun is heating up, the temperature is rising, and so too is the chip war. Sanctions between the United States and China have partially derailed the global electronic component supply chain’s recuperation. China’s latest export restriction on gallium and germanium, two elements that are critical in semiconductor manufacturing, could further amplify the raw material shortages affecting PEMCO market segments. Advanced digital components, such as CPUs, are expected to come out of a longlasting gallium and germanium drought unscathed. Still, it would affect peripheral components such as LEDs and fiber optics.

Macroeconomic pressures continue to impact consumer demand. There was hope that orders would pick up during the shopping festival in China to mitigate some of the excess
electronic component inventory. This did not happen.

Excess inventory continues to impact the semiconductor industry, with DRAM and NAND experiencing some of the worst drops. However, memory giants, Samsung Electronics and SK Hynix, believe that Q3 2023 will be the beginning of a revival in the memory market.

By David Manners 11th September 2023 I. Electronicsweekly.com

Download the full pdf report here>

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The US has also extended the ban to over 40 countries which are seen as likely to buy the chips for re-sale to China.

“Today’s updated rules will increase effectiveness of our controls and further shut off pathways to evade our restrictions. These controls maintain our clear focus on military applications and confront the threats to our national security posed by the PRC Government’s military-civil fusion strategy,” said IS Secretary of Commerce Gina Raimondo.

The ban is seen as particularly affecting Intel, Nvidia, Xilinx and TSMC. Nvidia has told investors its A100, A800, H100, H800, L40, L40S, and RTX 4090 products could cone under the ban.

“The US needs to stop politicizing and weaponizing trade and tech issues and stop destabilizing global industrial and supply chains,” said China’s Foreign Ministry spokesperson Mao Ning.

“Overly broad, unilateral controls risk harming the US semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere,” said the SIA.

By David Manners 18th October 2023 I. Electronics Weekly

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Harwin has created a range of retro-fittable 360° anti-interference back-shells for its Kona high-power connector series.

“These back-shells will prevent unwanted EMI leaking out from the connector-cable assembly into the surrounding system,” according to the company. “The two-part construction of the Kona backshells enables engineers to up-grade their existing cable assemblies with 360° EMC shielding.”
Kona connectors come in 2, 3 and 4 contact versions with an 8.5mm pitch, and can carry up to 60A per contact. As well as cable end versions, board and panel-mount versions are available – the latter allowing complete shielding with metal enclosures.

Cable end shell types are designed to accommodate flexible metal braiding (left), and are supplied with tie-bands to attach the braiding to the shell, and the back-shells install with simple tools.

Construction is 6061 aluminium aerospace alloy, nickel-plated for corrosion protection.
Use is foreseen in space, unmanned aerial vehicles, robotics and electric vehicles.
“In situations where power connectors are situated near a dc-dc converter, such as in vehicle charging infrastructure, the high currents being transported can cause distortion waves that will place stress on the converter,” said Harwin v-p of products Ryan Smart. “By having a back-shell shielding option we’ve added an offering that can address problems of this kind.”
Kona connectors have 2mΩmax contact resistance and are rated for 250 mating cycles and 1.5k dc (or peak ac) at sea level. Max voltage is 3kVac (1minute), or 500Vac at 70,000ft (21km/44mbar).

Harwin products are manufactured in the company’s facility in Portsmouth, England.

Original article published on: https://www.electronicsweekly.com/news/products/connectors/emi-back-shells-for-harwin-mini-power-connector-2023-07/

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After nearly two years of severely constrained supply conditions, electronic manufacturers are finally reporting improvements in the delivery of some components, shortening lead times and reduced pressure on average selling prices across the industry. The situation remains fluid and uneven, though, and restoring the procurement environment to a state of balance is still months away, according to industry executives.

Clearly, conditions are still not optimal in the electronics manufacturing business, or even in the larger global economy where enterprises across multiple industries are reporting weakening sales and either freezing hiring activities or cutting the workforce. 

In the electronics sector, many OEMs and electronics manufacturing services (EMS) providers are still struggling with lack of clarity about actual end-customer needs and the ability of suppliers to meet their procurement requirements. Automotive OEMs, for example, remain in a quandary, unable to source sufficient quantities of critical components like microcontrollers. As a result, automakers like Toyota Motor Corp. have been cutting vehicle forecasts for even 2023.

“We have seen a high production plan of 9.7 million units and worked hard with the suppliers and production sites in order to deliver as many cars as soon as possible to our customers who have been waiting for a long time for their cars to be delivered,” said Masahiro Yamamoto, the chief accounting officer for Toyota, during a call with analysts to discuss the company’s fiscal 2023 second quarter financial performance. 

He added: “However, it’s still difficult to predict the future due to risks such as procurement of semiconductors. Therefore, we decided to revise our plan to 9.2 million units, which is down by 500,000 units from the previous forecast. We intend to continue to consider all possible countermeasures and make every effort together with our suppliers and production sites.” 

All segments of the economy have been exploring innovative ways to resolve sourcing challenges like the one Toyota faced during its recent quarter but solutions have proved elusive, according to industry executives. As the procurement problem worsened in the electronics industry at the beginning of this year, it pitched OEMs against OEMs, created rifts in the relationship between chip suppliers and some of their top clients, resulted in double-ordering of components and spot hoarding, which is now showing up in higher inventory levels at distributors and semiconductor vendors. 

Avnet Inc., for example, closed its fiscal 2023 first quarter ended October 1 with inventory worth $4.65 billion, up from $4.24 billion, in the preceding quarter, and 42 per cent above the year-ago level of $3.28 billion. Pricing have risen over the last year, accounting for a portion of the increase, but stocks have risen also as companies demanded greater buffer inventories and as distributors ordered more parts to meet demand. 

“We are more deeply engaged with our customers and suppliers than ever before, which enables us to maintain the necessary expertise and capabilities to help them navigate today’s supply chain complexity,” said Phil Gallagher, CEO of Avnet, late in October after announcing the company’s financial results. “With the structural and organizational changes we made to our business over the last two years, we are well positioned to continue serving as control tower for our customers and suppliers. In the quarter, demand remains strong globally in key vertical segments like transportation, industrial, and aerospace and defense. And we have continued to invest in inventory to meet this demand.” 

New phase

Component distributors have long been in the vanguard of helping to smoothen out wrinkles in the electronics supply chain. Adding to their traditional procurement functions, the top distributors have beefed up their supply chain management functions in recent years and actively monitor inventory levels across the industry to gain better visibility into actual requirements and production activities.

They monitor demand-supply conditions and provide just-in-time inventory management services that have helped to optimize production operations at OEMs and their contractors. The information gleaned is typically shared with customers and suppliers as well as disseminated via distribution websites to other interested parties. 

In one such publication recently, Avnet shared the result of a survey conducted about engineering and procurement activities that confirmed anecdotal reports of a non-linear recovery within the industry. It painted the portrait of an industry struggling with uneven demand-supply conditions, indicative of the early phase of a downturn. The report also confirmed closer working relationships between procurement professionals and engineers, according to Avnet. 

“Relationships between engineers and distributors are continuously evolving and cyclical, and right now, we are seeing an increased understanding of the value that distribution, and its associated services, can add in the midst of prolonged uncertainty,” said Peggy Carrieres, VP of sales enablement and supplier development at Avnet, in the Avnet Insight report. “Engineers and product designers who lean into distribution’s design and supply chain services will not only be prepared to succeed in the current environment, but also be well positioned to navigate any potential future disruptions the industry—and technology—­may face.”

The current industry cycle is in many ways unique. It emerged from a confluence of factors, including the Covid pandemic, the tech Cold War between the United States and China, other geopolitical disturbances, including the Russia-Ukraine war and amidst weakening global economic conditions. The result is a market marked by numerous imbalances, including component shortages and rising oil prices, all of which make prognostications about the direction of the industry difficult.

The disruptions are even more challenging for companies that are trying to divine the direction of the technology manufacturing supply chain. The supply shortages the industry was grappling with is unraveling but in a highly unusual format where certain segments have completely returned to normal operating conditions while others remain stuck in an unyielding or even worsening condition. 

It is a phase that is fraught with problems for components suppliers and OEMs as well as EMS providers faced with uneven supplies, rising inventories, demand opacity, and other sourcing issues. Demand, which appeared robust only a few months ago, has petered out, except in a few sectors, leaving the industry contemplating the possibility of mountainous loads of components booked at the top of the latest upcycle but that are now no longer needed at manufacturers. 

The disparity in supply availability is mindboggling. Lead times have eased back completely in some markets, including for memory products. In fact, memory manufacturers have more than sufficient supplies to meet customer requirements. They are reporting excess inventories, which has in turn forced down ASPs as OEMs and EMS companies sharply pare down orders. 

Toyota, for instance, remains unable to meet customer demand because of the continuing shortage of some components despite its famous JIT manufacturing system and recent efforts to work with semiconductor suppliers and others to assure supply of critical components, according to company executives who said, “it is difficult to predict the future due to rapid changes in the business environment.”

The industry must work together to resolve many of these challenges. Auto manufacturers are directly signing procurement agreements with semiconductor suppliers, working in tandem with their tier-1 partners but also collaborating with third-party service providers. Distributors are also being tapped for their expertise in supplier and inventory management by OEMs that have in the past purchased components directly from manufacturers. 

This is because no single player in the production process can solve the current problems, many of which start much earlier in the manufacturing supply chain and sometimes even in the raw material procurement phase.

“These tremendous changes, including the semiconductor procurement situation and other factors, are occurring concurrently and for the broadly based auto industry, these changes could have a significant impact in the future,” said Kenta Kon, chief financial officer at Toyota. “We have been constantly discussing with suppliers without drifting away from our focus of enhancing competitiveness over medium and long term. Toyota and each and every one supplier [must] work as one to implement competitive measures to address these things.”

The post DISTRIBUTORS GRAPPLE WITH CONFLICTING SUPPLY CHAIN SIGNALS appeared first on Connect Electronics.

Manufacturers and suppliers of electronic parts, no matter how big or small, all their inventories and productions had been sucked out of the market. The lead time for highend manufacturers such as AKM, TE, STM, and NXP, and others, has doubled from 18 weeks up to 36 weeks.

Chip 1 Exchange’s Expert Solutions

We are already in the last quarter of 2020 and no one could ever tell when this pandemic will end. Even experts cannot predict how long we will experience these challenges. Fortunately, Chip 1 Exchange has the supply-chain expertise to resolve your component shortages.

Chip 1 understands the importance of shortage elimination and our team of highly qualified salespeople are ready and capable to quickly source electronic components from around the world.

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Counterfeit parts often have inferior specifications and quality. They may be a hazard in a critical system such as an aircraft navigation and life support equipment or space vehicle. The sale in consumer markets of electronic components making it easier for counterfeiters to integrate inferior and counterfeit goods into the market.

The Global Chip Shortage has affected our lives more than you think, and it’s not solely due to low supply. One of the main reasons is very high demand. The demand for electronic products that use microchips like computers, smartphones, tablets, and even vehicles has skyrocketed in recent months.

The increased demand from distributors, the manufacturing sector, suppliers, and other legitimate businesses increased activity for the proliferation of counterfeit components.

Because of the steadily growing demand for such products, criminals have more opportunities to sell these fake chips with less risk of detection.

WHY THIS MATTERS

Imagine a defibrillator sending incorrect high voltage electric shocks to a patient? How about a missile made of counterfeit parts was launched and missed its target?

The counterfeit electronic parts industry is a 75 Billion dollar money machine. Counterfeit parts are said to be integrated into 169 billion dollars worth of electronic devices. The fake semi industry has infiltrated many markets, disrupted operations of component manufacturers, and has been a supply chain problem for a while now.

In a WSJ report, counterfeit parts are found about three times a year. In 2010, the U.S. military bought an astounding 59,000 counterfeit chips, counterfeit electronic parts, and integrated circuits. Limited resources and poor quality control measures resulted in the defense industry finding fake chips seven times in five years.

A SOLID SUPPLY CHAIN IS NEEDED

Paying attention to the supply chain is essential for companies to reduce counterfeit components and electronic parts. Improving the process by identifying where fake chips enter the supply chain will help lessen future incidents and improve service quality.

The process of finding a counterfeit chip or counterfeits is not easy. We have listed a few methods to help you determine the authenticity of an electronic component, and hopefully, these methods will avoid unfortunate incidents with your company in the future.

5 TECHNIQUES TO IDENTIFY COUNTERFEIT PARTS

Visual inspection is not enough.

1. READ THE LABEL

Have you seen a genuine chip before? If you aren’t working in the semiconductor industry, likely, you don’t. These semiconductors are usually so small that it’s hard to see the spec parts on them.

Legitimate, high-quality electronic components have clear part numbers and clear markings that can validate their authenticity. Counterfeits upon inspection will have a compromised surface, a grainy part number, and other incorrect information that will need further inspection.

Counterfeits are unlikely to impact the giants of the industry who bought their components directly from chips foundries. These fake electronic components are felt more by companies acquiring parts from distributors at any point down the supply chain.

2. DO AN X-RAY INSPECTION

Doing an x-ray inspection on electronic components will show you what’s under the hood so you can identify a real one from a fake.

Here are the signs to look for:

• Missing or inconsistent die sizes
• Mismatched part numbers and date codes
• Broken or missing wire bonds
• Visible Delamination
• Inconsistent indents

3. USE A SCANNING ACOUSTIC MICROSCOPE

It might sound over the top but using a Scanning Acoustic Microscope (SAM) is the best way to find laser etching under blacktopping. Once etching is found, resurfacing was likely done to replace the original markings.

Of course, you can use acetone wash, but that method pretty much destroys the counterfeit chip it’s used on, thus preventing you from using it if it passes inspection.

4. LOOK FOR SIGNS OF RESURFACING

Counterfeiters are becoming quite good at avoiding detection these days. One of the most common techniques for creating counterfeit chips is a “resurfacing” technique called blacktopping.

They sand off the original markings and put on a polymer coat to cover up the effects of the sanding. Sometimes, however, there are noticeable signs of blacktopping. For example, indents on the chip might be partially covered by the polymer.

5. BE ON THE LOOKOUT FOR PHYSICAL DEFORMITIES

To make money, many counterfeiters use cannibalized parts from scrap electronics and sell them as new. Physical wear and tear will be visible on the material upon visual inspection.

Counterfeit components have bent leads and pins, unnecessary markings on the surface, and scuff marks on the corners. These visual cues on the surface or the use of a magnifying lens will help you determine if the electronic component is legitimate or not.

Why Buy Genuine Chips?

Counterfeit chips are twice more likely to malfunction than the real ones. Counterfeiting is not interested in having a long-term business. Their methods are based on deception, exploiting resources, and quick profit.

The purchase of a genuine chip from a reliable company ensures safety, service quality, and peace of mind. Counterfeiters don’t have this in mind when they sell counterfeit parts.

DESPERATE TIMES CALL FOR TEMPERATE MEASURES

People who sell fake electronics would love nothing more than to take advantage of people who don’t know any better.

Chip 1 Exchange has been at the forefront of ensuring that our customers do not fall victim to counterfeiting. When they purchase electronic parts from our company, we have the proper equipment and testing methods to detect counterfeit parts and ensure what our customers are getting legitimate electronics all the time.

The post HOW TO SPOT COUNTERFEIT ELECTRONIC COMPONENTS appeared first on Connect Electronics.