Category: Uncategorized

Circular Economy- reclaim & reuse electronic components.

Posted on by Maulin Buch

Circular Economy - reclaim & reuse of electronic components

The global demand for electronics continues to grow. 

The International Data Corporation forecasts that the internet of things, artificial intelligence, and virtual reality will drive worldwide spending on information technology to more than $1 trillion. In the digital age, electronic products are an indispensable part of our lives. 

However, the fast pace of innovation and short product life cycles also mean that electronics often have a short user lifespan. This has led to a rise in e-waste as well as a loss of valuable resources locked inside these devices. Every year millions of tons of electronic devices end up in landfills instead of being recycled. 

Reducing this waste and finding new ways to reuse or recycle old electronics could help reduce their environmental impact while also driving business value at the same time.

Industrial digitalisation and the circular economy are two important megatrends that can help drive innovation in the electronics value chain. The global market for electronic devices is estimated to be worth more than $177 billion in 2019.  

As a result, companies operating in this sector now need to adopt new strategies to remain competitive in the digital age. One of those is adopting a circular economy approach, which involves principles such as sustainable production, reuse, and recycling of materials at every stage of their lifecycle.

By applying these principles to electronics, computers, server boards, hardware, internet of things, telecom electronics, and more, it’s possible to reduce not only waste but also recover valuable electronic components/devices that can be used over again in new products – creating a closed loop system where nothing is wasted and everything has a second life somewhere else in the supply chain.

Circular economy thinking is everywhere these days. Innovation leaders in every industry embrace circular principles to reduce waste, cut costs and boost productivity.

Component recovery, re-use & circular economy solutions

Retronix Component recovery, re-use & circular economy solutions

Manufacturing Stage: Re-integrate high-value components from fallout, end of life products, scrap – back into your supply chain.

Life Extension: Re-process, re-condition, refresh, test and verify components for aftermarket care and future sourcing.

End of Life & Re-sourcing: Recover your devices from scrap, prepare for re-use, test, validate and verify for integration in your refurbishment and manufacturing stages.

Circular Economy ethos of refurbish & re-use. This isn’t a new vision for Retronix – we have successfully been offering customers our recovery & re-use solutions for over 30 years.

Our wide range of services to the electronics industry allows us to offer a complete service for the safe recovery of parts ready for your new builds.

  • IC Tests 
  • Visual Inspection 
  • Re-reeling & Re-packing 
  • 24 Hour Post Bake

Retronix has developed a process to recover and refurbish these electronic components including BGAs, to enable reuse. This process meets the component manufacturer’s specifications of maximum reflow cycles allowed on an electronic component, adhered to extensively by both OEMs and CEMs. 

In 2021 Retronix recovered nearly 3 million components from approximately 650,000 PCBs that would otherwise have gone to scrap or landfill. We expect this number to double this year due to the ongoing supply chain disruptions, more organisations discovered Component Reclaim as a viable and valuable solution to their component sourcing issues.

CONTACT US FOR MORE INFORMATION

Cheap as Chips | A Road to Recovery for Automotive

Posted on by Maulin Buch

Cheap as Chips | A Road to Recovery for Automotive

The chip shortage is back for Year 2 and, the automotive industry continues to bear the brunt as semiconductor manufacturers continue to neglect their cheap chips. 

Nvidia Corp recently led a string of predictions from fellow chipmakers at the J.P. Morgan Tech Forum with its forecast for the chip shortage. With a consensus that there will be minimal improvement to the situation before the middle of 2022, maybe not even then.    

A somewhat alarming outlook for a sourcing issue that dates back to March 2020 but, of the endless problems thrown at companies by Covid-19, the global chip shortage appears to have been one of the most destructive. Companies should count themselves lucky to have avoided the disruption inflicted by the lack of chips which has caused backlogs for products, including vehicles, consumer electronics, and household appliances.

Legacy Semiconductors

Perhaps no other industry has been as affected by the semiconductor deficit as automotive, with carmakers large and small relying on these tiny computer chips to power everything from infotainment systems to steering wheels and much more. According to US-based consulting firm AlixPartners, shortages related to semiconductors cost the automotive industry a whopping $210 billion in revenue in 2021.

The automotive OEMs aren’t holding their breath about the situation letting up anytime soon, either. As reported by Reuters, Ford has taken the tough decision to suspend production at eight factories following a slump in share. Even Elon Musk has announced that because of the chip shortage, there will be no new Tesla models released in 2022. 

As with most things in the convoluted automotive industry, there are countless reasons why the chip shortage has been so severe. What might be surprising is a route cause to the situation is the type of chips used. Yes, while automotive technological advancements have progressed significantly over the years, cars use a lot of older, lower-tech legacy chips, which cost mere dollars to produce. 

Therefore, mature vehicle chips, which can date back to 2005, deliver a lower profit margin, and ultimately there is less incentive for chip manufacturers to invest in more capacity. Both Infineon and Apple Inc’s Tim Cook have agreed that the market for mature chips would remain tight as semiconductor makers have an incentive to focus on the newest and most expensive chips (Reuters). 

If the semiconductor giants have their way, the days of the automotive industry relying on these cheap commodity chips are numbered. In the meantime, before more factories close their doors, there need to be shorter-term solutions to this relentless chip shortage.  

Component Recovery

While currently there is a lack of capacity for legacy semiconductors, it doesn’t mean that there are no chips out there. However, these mature components might be attached to obsolete PCBs, gathering dust in storage. Retronix has a component recovery service that provides a means to safely remove chips from PCBs and return to a like-new condition. We combine our rework, re-tinning, re-balling, ICOS coplanarity testing, electrical testing, and re-packaging services, to ready components for your new builds. 

What’s more, with legacy components dating back to as early as 2005, six years before the RoHS directive, there may be a requirement to convert parts from Pb to Pb Free. Our fully automated alloy conversion system will ensure that your devices aren’t exposed to excessive heat or abrasion, meeting the stringent High Reliability standards of GEIA-STD-0006. Retronix is one of the few companies that offer a full bill of material (BOM) conversion process.

Contact Us For More Information

Could chip shortage push automotive towards a more sustainable future?

Posted on by Maulin Buch

Could Chip Shortage Push Automotive Towards a More Sustainable Future?

Despite automotive only representing 10% of semiconductor demand, it has been hit the hardest by the global chip shortage. With the crisis showing no signs of letting up, could a Semiconductor Circular Economy put the brakes on the supply chain crisis?

The Impact of the Shortage on Automotive

The global semiconductor shortage has caused carnage across the automotive supply chain, so much so that the everyday consumer has now become affected. Consulting Firm AlixPartners has estimated that the supply chain crisis has cost the industry a staggering $210 billion in revenue in 2021 alone. Shocking but not entirely surprising if you look at the growing list of OEMs that have had to either halt production or shut factories completely, including Daimler, Toyota, Ford, JLR, and most recently Opel.

As would be expected, there are continuing disputes over how long the shortage will last. The year 2022 is being cited by many industry professionals as the holy grail. However, such predictions indicate that there is going to be a definitive end to the draught. The truth is that there has been an imbalance in the semiconductor supply chain for many years now, far before the recent geopolitical shifts, natural disasters, and pandemics (of course). And with the car industry now rapidly pivoting to electric vehicles, attaining a semiconductor supply chain equilibrium seems almost impossible.

A Semiconductor Circular Economy

This dire supply chain scenario has finally forced organisations to take notice of innovations that support a semiconductor circular economy in order to address the current global supply chain imbalance while mitigating future shortages (AZO). More importantly, the model would push us toward a more sustainable future within both automotive and the wider electronic industry.

While electronic goods have revolutionised our daily lives, in this tech-hungry world, we are eating through electronic devices at an alarming rate. Each year a staggering 50 million tonnes of e-waste is produced and, if current trends continue, it is forecast to reach 120 tonnes by 2050. Sadly only 20% is recycled.

Sundar Kamak, Head of Manufacturing Solutions of Ivalua Inc. discussed with Forbes the need for manufacturers to turn their attention to reusing and recycling chips from older devices and equipment, “Not only could this help ease the burden on supply chains, but it will also have a positive impact on the economy and encourage regenerative design to reduce reliance on finite resources”.

How can we Move from Linear to Circular?

For decades the semiconductor industry has relied upon a linear economy model, and therefore, the move to circular won’t exactly be ‘straight’ forward for organisations. However, as highlighted by the UN, moving to a circular approach will open doors to new markets for businesses and provide opportunities to increase market share, cut costs and risks, push innovation and align performance with public expectations.

“Successful businesses of the future will be ones that deliver excellent value with minimum resource use and environmental impacts while moving rapidly toward nature-positive solutions and net zero carbon emissions” UN.

For three decades now, Retronix have been helping businesses adopt the Circular Economy ethos of refurbish and re-use. As previously highlighted by Kamak, everyday, millions of dollars of brand new and high-value components are scrapped by manufacturers simply because they are attached to faulty/obsolete PCBs.

Retronix have developed a process to recover and refurbish these electronic components including BGA chips, to enable reuse. This process meets the component manufacturer’s specifications of maximum reflow cycles allowed on an electronic component, adhered to extensively by both OEMs and CEMs. 

In 2020 Retronix recovered nearly 3 million components from approximately 650,000 PCBs that would otherwise have gone to scrap or landfill. We expect this number to be double this year as due to the component shortage, more and more organisations discovered Component Reclaim as a viable and valuable solution to their component souring issues.

CONTACT US FOR MORE INFORMATION

Gray Market – Don’t get burnt by Counterfeit Chips

Posted on by Maulin Buch

The Gray Market - Don't get Burnt by Counterfeit Chips

With the electronic component shortage predicted to last until at least 2022, Retronix has not only seen a significant growth of customer requirements for our testing services. But alarmingly, the quantity of counterfeit chips and suspicious components that we are detecting has risen significantly also. During any time of shortage, we observe a spike however, the severity of this particular supply crisis has dramatically worsened the counterfeit chip problem. 

Playing with fire

The top manufacturers within the computing industry are lucky enough to receive orders directly from the chip manufacturers. However, manufacturers from other industries such as automotive, white goods, and medical electronics, source their chip stock from intermediary suppliers. Now because it is near enough impossible for these suppliers to obtain chips directly from the source, many have been exploring alternative channels. As a direct result, the gray market for semiconductors has grown, at an exponential rate.

“The gray market refers to the sale of products via distribution channels that are unintended, unofficial and unauthorised by the real vendor of the products.” Techopedia 

Dubious sellers are taking advantage of the dire situation, luring in desperate buyers with the likes of search engine ads and swindling them fake chips under the guise of genuine stock. 

The Danger of Counterfeit

According to Semiengineering, the counterfeit chip market is growing with a worldwide value of $75 billion. Hand in hand with the industry becoming more lucrative, counterfeiters are becoming more sophisticated in their techniques. However, the difference between genuine semiconductors and fakes semiconductors couldn’t be more extreme. As explained by the Semiconductor Industry Association, chip manufacturers spend billions of dollars each year developing, manufacturing, and testing products that will perform to the highest standards and reliability levels for many years.

Counterfeiters, on the other hand, will repurpose components from old electronic waste using crude and poorly controlled processes that churn out semiconductors with far higher failure rates. This inherently effects the long-term reliability of these devices and worryingly jeopardises lives since they are prone to fail at the worst possible moments, such as when car airbags need to deploy, defibrillators are used to apply shocks, or when aircraft are landing.

XIlINX Device our Test Department Detected as Compromised

XILINX device with 2D barcode rubbed off

XILINX device with 2D barcode

Don't get duped by counterfeiters

Retronix has a test department dedicated to the identification of counterfeit parts along with the best tools for this process. We also have years of experience earned from dealing with this issue for numerous customer in varying industry sectors. 

Due to the supply chain shortage, our test department has been uncovering new and inventive techniques that we have never seen. For example, we are starting to see chips with 2D Barcodes that have been laser-etched off. Suppliers will say that the 2D Barcode was only removed to conceal how the parts made it into the open market, encouraging desperate buyers to use the parts, assuring them the functionality of the devices will not be compromised. Don’t fall for it! Any device which has been visibly altered or changed should be considered compromised or counterfeit. This issue has also recently been raised by ERAI and more information can be found on a discussion on the ERAI: Counterfeit Part Avoidance, Detection, Disposition and Reporting Linkedin page.

If you have acquired components from an unverified source or are unsure about the authenticity of the parts, please get in touch with Retronix today. 

CONTACT US FOR MORE INFORMATION

Tin Whisker Trials & Tribulations | Finally a Micro Component Tinning Solution

Posted on by Maulin Buch

Tin Whisker Trials & Tribulations - A Solution to Micro Component Tinning

It’s a well-known fact (there are hundreds of technical papers confirming) that Tin Whisker filaments can grow uncontrollably from tin plating. The danger comes when one of these filaments peels off the tin and connects with an adjacent component causing a short.

When the EU Restriction on Hazardous Substances (RoHS) directive came into place, the High Reliability industry braced itself for an influx of tin whisker issues. That was back in 2011 and thankfully since several techniques and applications to tame the tin needles have been identified.

The Solder Dip Solution

The most common method to eliminate tin whiskers is to convert the plating from ‘lead-free’ (tin plating) to tin/lead plating. The process is carried out by simply dipping a component’s terminations into tin-lead solder. High Reliability industries (aerospace/defence/medical) are allowed dispensation to use tin/lead solder, as they cannot run the risk of tin whiskers long term. Unlike, commercial products such as phones/laptops that have a much shorter life cycle.

However, it’s still not that simple as the conversion process needs to conform to a standard called GEIA which strictly controls dip time and temperature, plus it must be automated. 

The problem is that 0402, 0603, and SOT chip capacitors cannot (until now) be handled in a manner that allows for automation. Such micro components are processed manually by someone picking them up with tweezers and hand dipping in a solder pot. It’s important to note that the success of solder dipping as a solution to protect against tin-whiskers directly depends on coating the exposed tin-plated surface (Electronic Design). 

The Cut Corner Solution

Despite this knowledge, many manufacturers are rejecting hand dipping, instead believing that assembling PCBs with lead paste will resolve this issue. The consequence of this workaround is that the lead solder from the paste only covers the sides of the termination but does not reach the top surface. As widely reported by NASA, this process DOES NOT protect against the risk of Tin Whiskers. 

Despite such clear evidence, the general thought process around the tinning of micro components such as capacitors and resistors is, “there is no suitable process that meets the GEIA standard, therefore it’s not a problem” so, issue a concession to bypass it. Or do the above which is a partial solution but not good enough.

The Retronix Solution

With the automated process designed exclusively by Retronix – Patent Pending – to tin micro devices such as 0402, 0603, SOT’s to GEIA standards, the industry finally has a comprehensive all-inclusive solution for tinning requirements.

  • The automated micro tinning process is carried out on our plating systems.
  • The lead-free capacitors are picked up by a specially designed tool that can hold multiple devices at a time.

The devices are moved to the fluxing station & then accurately over the solder wave. The pre-programmed automated system ensures the dip is precise & consistent.

Click HERE to learn more about our Micro Device Hot Solder Dip Process – Patent Pending. 

CONTACT US FOR MORE INFORMATION

Joining Scotland in Forging Ahead to Tackle Global Climate Change

Posted on by Maulin Buch

Joining Scotland in Forging Ahead to Tackle Global Climate Change

In 2019 the Scottish Government declared a climate emergency and subsequently set a landmark mandate of achieving net-zero greenhouse gas emissions by 2045 – five years before the rest of the UK. At Retronix, we are proud to be joining our home country in forging ahead to tackle global climate change.

Scotland in the Spotlight

Scotland as a country may be small-in-size but, we have some of the most ambitious emission-reducing targets on the planet. What’s more, this November, Glasgow will have the world’s attention as it hosts the United Nations Conference of Parties #COP26. With all eyes on Scotland and the expectation building up to deliver a global agreement, Retronix has a part to play as a Scottish business to become Net-Zero by 2045.

E-waste recycling boost needed ‘to enable the transition to net-zero.’

Material Focus 

Retronix have always been Green

For Retronix, this is not a new concept, and since our inception (over 25 years ago!), we have been supporting the introduction of recycled electronic components back into the supply chain. The components that we recover can be found in anything from your mobile phone or tablet, hospital ventilators to car safety systems.

In 2020 alone, Retronix recovered and/or refurbished approx. 3 million electronic components from approx. 250K computer boards that would otherwise have gone to scrap. Our environmental consultants, Redshaw Advisors, estimate that Retronix recovered approximately 6,000 tonnes of e-waste that would otherwise have gone to landfill.

Supporting Scotland's Environmental Goals

While Retronix is an international organisation, we have a strong, Scottish customer base, serving electronic companies within High Reliability, Oil & Gas, and security systems. By providing our services, we are also improving their environmental performance and carbon footprint. In turn, we are supporting other Scottish organisations in reaching their environmental targets. 

This year we were proudly certified as Operationally Carbon Neutral. Our focus for the next two years is to invest in Woodland creation and peatland restoration schemes in Scotland to not only offset our emissions but to aim for a positive impact on Scotland’s overall environmental performance. 

The core of the business supports sustainability and environmental improvements and our technology solutions support the creation of a sustainable future.

CONTACT US FOR MORE INFORMATION

The Retronix Component Recovery Decision Tree

Posted on by Maulin Buch

Retronix Electronic Component Shortage Solutions

If you don’t already know about the current global chip shortage, you must be living under a rock. However, did you know that Retronix could have the solution to your supply chain woes?

Is any industry safe from the component shortage?

While there has been extensive coverage on the chip shortage impacting the automotive industry, the reality is that businesses in every sector are hurting. Just, when we thought that the global chip shortage couldn’t get any worse, the situation intensifies, and it now looks like millions of everyday consumers will be impacted. While small in size, the semiconductor plays an integral role in all modern-day technology. From the sought-after PlayStation, the humble toothbrush to the voice-controlled speaker that is now becoming commonplace in our homes. The tiny chip hides in so many products that feature in our day-to-day lives. 

Having been in the industry for 30 years, Retronix has experienced component shortages before but never to the extent where the everyday consumer is affected. 

Computer Chip Shortage

Reinhard Ploss, the Chief Executive of German chipmaker, Infineon, agrees that this is uncharted territory for the semiconductor industry, 

“The current situation, where all verticals are booming, I have never seen before” CNBC. 

How long will the component crisis last?

As reported in Bloomberg, the lead time for ordering and taking delivery of a computer chip topped 17 weeks in April.  According to Susquehanna Financial Group, this is the longest wait since the firm began tracking data back in 2017, putting the supply chain into the danger zone. 

As would be expected there are several disputes over how long the shortage will last. Chuck Robbins, Cisco CEO, is optimistic about the situation telling BBC, “We think we’ve got another six months to get through the short term. The providers are building out more capacity. And that’ll get better and better over the next 12 to 18 months.”

However, IBM President Jim Whitehurst isn’t as confident about the situation, sharing with the BBC that it would be years before the semiconductor supply chain returned to normal. “There’s just a big lag between from when a technology is developed and when [a fabrication plant] goes into construction and when chips come out,”. Reinhard Ploss, Infineon, shares the same bleak outlook for both this year and the next exclaiming that “We’re fighting for every wafer”.   

What is the solution?

Our Retronix Component Recovery solution doesn’t require any fighting, instead, all we ask is for you to do some component searching. Search your scrap for faulty/obsolete PCBs, your storage for old PCBs, and your supply chain. From experience, we can promise that you will be surprised by what you can uncover. We can also promise that our Retronix advance and precise component reclaim service can safely recover any high-value component that you find.

Many organisations don’t realise that the Retronix Recovery Solution even exists and in desperation flee to the grey market. Fortunately, our IC testing suite can validate the authenticity of components sieving out any nasty counterfeits from customer supply chains. 

Still unsure of how we can help? Follow our Retronix Component Recovery Decision tree to find the solution that’s right for you. 

Component Recovery Decision Tree

CONTACT US FOR MORE INFORMATION

The Automotive Industries Component Shortage Crisis

Posted on by Maulin Buch

The Automotive Industries Component Shortage Crisis: Component Reclaim Eases Burden on Supply Chain

With the chip crisis forecast to hit the production of 3.9m vehicles this year, the automotive industry is to lose a staggering $210 billion in revenue in 2021 alone. 

With the ability to quickly recover valuable components that organisations desperately need while enabling a Circular Economy that positively impacts the environment. Component Reclaim is offering businesses a viable solution out of this dire supply chain crisis.

When will the chip shortage end?

As would be expected, there are several disputes over how long the shortage will last. However, it’s difficult to ignore the forecasts of the chip makers themselves. Unfortunately for the likes of GM and Ford, who have had to shut down production at many of their plants, it’s not looking promising. 

Arm Holdings Chief Executive, Simon Segars, is predicting that the crisis will prevail until at least the end of next year, citing that the “This isn’t a short-term problem with a short-term solution.” Intel CEO, Pat Gelsinger, shares the same bleak outlook, believing that the industry won’t be back on track for another couple of years (Techspot).

With chip lead times pushing 26+ weeks alternative ideas and technologies are beginning to be explored as a means of helping to speed up recovery. 

Alternative ideas & technologies

As discussed in Forbes, Sundar Kamak, Head of Manufacturing Solutions of Ivalua Inc. has called for manufacturers to turn their attention to reusing and recycling chips from older devices and equipment.  

“Each year millions of devices and equipment containing chips are scrapped or thrown away – the UN found there was 53.6 million metric tonnes of e-waste in 2019 globally, of which just 17% was recycled. Not only could this help ease the burden on supply chains, it will also have a positive impact on the economy, and encourage regenerative design to reduce reliance on finite resources”, Kamak said (Forbes).

Component Reclaim may seem like a new phenomenon, but not to us. At Retronix, we have been recovering components from PCBs and returning to a ‘like new’ condition for three decades now. Operating to IPC-9592 STD, our leading technology, including Laser Reballing, delivers the safest recovery and refurbishment service in the industry. 

Our process to recover and refurbish devices, including BGA Chips, not only reduces the amount and cost of scrap going to landfills but also seriously damages the counterfeit industry. With five electronic components on average making up to 60% of the value of an entire assembly, we have seen customers recover £120k worth of chips from just one board.

Retronix is carrying out this service and other bespoke services for hundreds of customers across the world, so what you may think is a unique issue you are facing we might already have a solution for. Our Component Shortage Service encompasses a range of solutions that could solve your sourcing issues quickly and safely: 

Click HERE to learn more or get in touch today via the contact form below. 

CONTACT US FOR MORE INFORMATION

Electronic Component Shortages

Posted on by Maulin Buch

The Electronic Component Shortage

At the start of the year, Retronix had reported on the critical semiconductor shortage threatening to hamstring production lines of the world’s largest carmakers – demand is high, supply is tight.

Fast forward to today and that looming threat has become a stark reality with the world’s biggest carmaker Toyota, having just announced that it is to slash worldwide vehicle production by 40% in September. Volkswagen, the second-biggest car producer, has warned that it may also have to slash production (BBC News).

What has caused this disruption?

As reported by the Harvard Business Review there has been a multitude of one-off factors that have caused this situation that likes of Samsung, VW and Apple find themselves in today. From fires in Japan, storms in Texas to more unnatural Geopolitical factors, these unrelated occurrences have created a domino effect of disruptions that have caused a severe in-balance in the semiconductor supply chain.

However, as highlighted by Business Line, “supply chains in all sorts of industries have dealt with shortages resulting from catastrophes before” and have managed to pull through. So, what’s different this time?

The Electronics Supply Chain

The truth is that this imbalance in the supply chain was present far before any of these “freak” occurrences. Direct Components explain that the shortage of multi-layer ceramic capacitors (MLCCs) is a consequence of the rise in demand for portable technology and automotive advancements. In turn, this has exasperated the availability of tantalum capacitors, a well-known MLCC alternative. Harvard Business Review calls for large manufacturers in automotive and other sectors suffering from this component shortage to take a long hard look at their supply chain strategies and ask themselves “Where have they prioritized cost reduction at the expense of risk management?”.

Certainly, if we have learned anything from the pandemic, supply chains are extremely volatile, and while the vaccine is picking up pace in the fight against COVID-19. The shortage in components doesn’t seem to be going away any time soon.

How can Retronix help?

From Retronix perspective, we have seen customers reporting that they are having to step outside of the approved suppliers to source the components they require. This has seen an upturn in our testing services as we act as a third-party test house to help our customers verify their new suppliers. Our Component Reclaim Service also offers a much-needed solution for customers by safely and quickly recovering and reworking components for builds.

Click HERE to learn more about our Semiconductor Shortage Solutions Service or get in touch today via the contact form below.

Component Shortage Infographic

CONTACT US FOR MORE INFORMATION

Chip shortage crisis – demand is high, supply is tight.

Posted on by Maulin Buch

Chip-shortage crisis : demand is high, supply is tight.

“The world’s largest carmakers are facing a critical shortage of semiconductors that threatens to hamstring production just as the industry tries to stage a comeback from a sales slump caused by the pandemic.”

CNN Business (London)

Major automakers are suffering from a global shortage of chips as demand is high, and supply is tight. This is a fallout from the Coronavirus pandemic, forcing carmakers to halt or slow down their production.

Audi, for example, is slowing their production by aiming to make 10,000 fewer cars in the first quarter of 2021 and putting more than 10,000 workers on furlough.

Their parent company, Volkswagen, also announced their slow down due the lack of chips on the market, as have other global carmakers such as Honda. Others have made statements about their adaptions in production.

“We are doing everything in our power to minimize lost production and to ensure that normal deliveries to customers can be resumed as rapidly as possible”

Volkswagen Group purchasing manager Murat Aksel said in a statement on December 18.

This bottleneck in the supply chain could hurt the automotive industry further as carmakers risk missing out on the demand uplift due to their assembly lines slowing.

Part of this is a result of the industry being forced to close their factories in 2020 due to the pandemic, resulting in leading semiconductor manufacturers reassigning their production capacity to companies making smartphone, laptops and gaming devices. This means they are now competing for the manufacturing capacity.

German car-parts company Continental described “largescale supply shortages”, with lead times of six to nine months, adding bottlenecks were expected to continue “well into 2021, causing major disruptions”.

CCS Insight analyst Geoff Blaber said: “Semiconductors have a broad range of applications but a very limited pool of companies capable of manufacturing the silicon.

“Demand is high, and supply is tight” and any sudden needs “can prove very difficult to accommodate”.

As this period of history is unprecedented it is impossible for analysts to make predictions using historical data as to the long-term impact and the length of time this allocation period will last.  But with all the other challenges being thrown at us all over the course of this year, we hope that the industry will overcome this without too much long-term damage to the industry.

From Retronix perspective

We have seen customers reporting that they are having to step outside of the approved suppliers to source the components they require, and this has seen an upturn in our testing services as we act as a third-party test house to help our customers verify their new suppliers.  Our testing services alongside services such as – component reclaim, retinning and alloy conversion are tools that we can offer the industry to assist our customers and support them through the tough times of allocation. Reclaim memory devices & high value IC’s from obsolete, damaged or old revision PCB’s.

Retronix can help with this. You can find out more about our component recovery here or get in touch with us and find out how we can assist you. We also carry out free of charge samples to help you prove our process and the benefits to your company.

If you have a requirement that you would like to discuss with us, please make contact via email: sales@retronix.com or use our Website Contact Us page.