Reactive vs. Proactive Approaches to Obsolescence Management

Effective EOL Sourcing Strategies Avoiding Counterfeit & Substandard Products

September 29th, 2015

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Bobby HolbrookDirector of Sales – Southeast

(850) 368 3676

bholbrook@siliconexpert.com

SiliconExpert Panelist

Agenda

• SiliconExpert Introduction 5 minutes

• “Effective EOL Sourcing Strategies” 40 minutesNick Rabbitt, Rochester Electronics

• “SiliconExpert: How we help with Sourcing” 10 minutesBobby Holbrook, SiliconExpert Technologies

• Questions & Answers 5 minutes

• Provide data and insight needed to remove risk

from the supply chain

• Electronic component data is aggregated and

normalized in our database

• Used by engineers and Supply Chain professionals

at leading OEMs, CMs, & distributors

About SiliconExpert

Reactive vs. Proactive Approaches to Obsolescence Management

300+ million part numbers

Helps manage risk, avoid redesigns

and manage obsolescence

Risk Analysis – Lifecycle, Inventory,

Environmental, Multi-Sourcing,

Counterfeit

Authorized inventory feeds daily

Our Database

Nick RabbittNorth American Sales Manager

Rochester Electronics

Expert Panelist

The Most Comprehensive Authorized Source for Extension-of-Life®

Semiconductors

Nick RabbittSales Manager, Americas

Agenda

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Rochester Electronics is the ONLY

company in the world CONTRACTUALLY

AUTHORIZED by over 60

leading semiconductor

manufacturers to

support their

customers

aftermarket

semiconductor

requirements

OCM PARTNERS

Authorized Product Solutions

The Semiconductor Lifecycle

2 – 5 Years Lifecycle

Obsolete Part Definition

Obsolescence Drivers

• Latest Fabrication facility costs over $5B

– Only Intel, Samsung, Global, and TSMC at 14nm

• One mask set for 28nm over $2M

– Must plan for 2-5 spins per product

• Over $100M investment to get leading edge silicon shipped for

every new product

– Mask costs plus design costs alone

• Consumer product pace (2-5 years)

• RoHS, REACH

Obsolescence Drivers

• Packaging availability – flip-chip substrates

– Minimum lot sizes from the packaging houses

• Silicon process availability

– Minimum lot sizes for the fabless

• Annual revenue thresholds per product regardless of process

and packaging availability

– $25M to $50M revenue/year/product not an unusual

requirement

• Example: DLA annual purchasing of all 5962 products is

equivalent to one product at one semiconductor company

about to go EOL

Counterfeit Part Definition

Counterfeit Drivers

• Price of broker product versus authorized product

• E-Waste

– Used, but Authentic parts

• Long-term systems designed using consumer silicon

– Obsolescence before first production product

• Long-term systems designed with a dependency on unfunded

refresh cycles

• Long-term systems designed using previous pieces and/or same

components as prior systems

• Longer-term system development timeline is longer than most

semiconductor products

Counterfeit Drivers

• DoD design contract phases avoid having an effect on

semiconductor content or architecture

– DoD wants flexibility in architecture to take advantage of

technology over time, but not everyone can get refresh

dollars when needed

• DoD budget cycles are a problem for last time purchasing and

showing lumped or front-loaded lifecycle costs

– OEM’s incentivized to show lower development costs up

front and de-emphasize total lifecycle costs for any new

program

• Poorly handled returns through some distribution channels

Counterfeit Drivers

• Processor architecture selection not adopted by consumers

(legacy continuation such as PowerPC)

• The allure of no NRE on FPGA’s

– Xilinx is the #1 counterfeited supplier reported by ERAI

– Yet lifetime of 10 years maximum

• Easy internet purchasing

• Clones make it through visual inspection and nominal test

conditions

• Lack of component engineering staffing attached to supply chain

organization

• The mistaken belief that Authentic always means Reliable

– A used Authentic part is of unknown Reliability

Counterfeit Drivers

• Software costs growing much faster than hardware costs

– Over 3x today and growing

– Large financial motivation to do whatever it takes to avoid

software changes

The Semiconductor Value Chain

SILICON DESIGN PACKAGE TEST CERTIFY

OCM Intellectual Property (IP)

OCM

Authorized/Franchised Distribution and Representatives

Authorized Aftermarket Manufacturers and

Distribution

Authorized Supply Chain

DFARS Aftermarket Definition

Aftermarket Manufacturer Definition

Authorized vs Franchised

Conclusions and Recommendations

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SiliconExpert Overview

Manage Risk

• Identify components at risk

• In-depth look into multi-sourcing,

inventory, compliance data and lifecycle

statuses

Avoid Redesigns

• Easily find fit-form-function cross

references

• Multi-sourcing options that help with design

decisions

Mitigate Obsolescence

• Avoid out-of-stock or costly last time buy

situations

• Proactive planning with PCN alerts,

years to end-of-life forecasts, and part

risk analysis

How SiliconExpert helps with sourcing components:

SiliconExpert’s Part Search Tool – Results Screen

How SiliconExpert helps with sourcing components:

SiliconExpert’s Part Search Tool – Cross References

How SiliconExpert helps with sourcing components:

SiliconExpert’s Part Search Tool – Risk Status

How SiliconExpert helps with sourcing components:

SiliconExpert’s Part Search Tool – Counterfeit Risk Alerts

How SiliconExpert helps with sourcing components:

SiliconExpert’s Part Search Tool – Counterfeit Reports

How SiliconExpert helps with sourcing counterfeits:

SiliconExpert’s Part Search Tool – Authorized Inventory

How SiliconExpert helps with sourcing components:

SiliconExpert’s BOM Manager Tool – Setting Alerts

Contact: Bobby Holbrook

Email: bholbrook@siliconexpert.com

Tel: (850) 368 3676

Q&A Session

For webinar attendees:

Demos of SiliconExpert’s

BOM Manager tool & BOM Analysis

Thank you!

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