In some of my previous blogs, I discussed different aspects of the obsolescence management problem and offered up a variety of solutions, culminating in the semiconductor lifecycle management (SLiM) program.
In this blog, I will look at one of the biggest disconnects between original semiconductor suppliers and military/aerospace contractors -- the mismatch between supplier Last Time Buys (LTBs) and military program funding. (See: Nuts & Bolts of Semiconductor Lifecycle Management, Part 1
and Nuts & Bolts of Semiconductor Lifecycle Management, Part 2
The majority of original semiconductor suppliers are focused on commercial or industrial markets, and the military market is either an afterthought or not considered at all. These suppliers plan their product line introductions and discontinuances around the lifecycle of the high-volume, short-lifetime commercial programs. When the product demand for these programs decline, the supplier then offers up a last-time-buy (LTB) to support the customers who need product out in the future. These suppliers do not plan with the military/aerospace customer in mind; they simply announce last-time-buys, raise prices, and then exit the business.
Commercial and industrial users can successfully work around the LTB requirements. They can forecast the long-term demand for their products, translate this into product needs, and then make business decisions about how much money they are willing to commit today for the ability to continue their product life. These companies can look at a variety of financial factors to determine if spending extra money today will be justified in order to ensure meeting their end customer demand in the future. They can weigh the risks of not being able to obtain more devices or having to pay higher prices later against the investment required to purchase excess inventory. They can also consider a product redesign and can upgrade to newer components.
In theory, the military/aerospace contractor should be able to use the same analysis techniques as discussed above, and they certainly do. However, the military contractor does not have the flexibility to commit to LTB purchases in the same way a commercial company can. Since they are driven by program funding, the military/aerospace contractor cannot commit dollars that have not yet been awarded, even when they are fairly certain that the demand will be there in the future.
So, the contractor is limited to only purchasing enough products to satisfy already awarded contracts and is forced to put future program extensions into the fickle hands of the obsolescence marketplace. The product redesign option is rarely a good option due to the high costs of redesign and requalification.
Working with a SLiM provider can offer a solution to the LTB funding dilemma. The successful SLiM supplier can offer a bridge between the strict LTB dates and the long-term demand for military/aerospace programs. By involving the SLiM supplier with both the military contractor and the original semiconductor supplier prior to the conclusion of the LTB process (or ideally even before the process starts), the SLiM supplier can offer a variety of solutions to continue production of the obsolete devices.
These solutions can include the purchase of inventory to be stored for the military contractor; the purchase of die to be stored for future builds as needed; the transfer of product information including device, package, and test information; and can ensure the uninterrupted supply of devices as military programs get extended.