What's missing from how the electronic and high-tech industry is doing business under an obsolescence mitigation (OM) approach is the long-term view. OM is, frankly, a tactical response to a strategic business challenge: sustaining long-term electronics systems viability.
OM is a disruptive, time consuming, and costly headache to aerospace and other OEMs. Whatís missing in OM is a range of preparations and services essential to secure long-term continuity and quality of supply at predictable costs. As mentioned in my last column, the word "mitigation" connotes a partial fix. (See: Military-Aviation Semiconductor Sourcing Remains Problematic.)
Iím advocating our industry adopt a process called Semiconductor Lifecycle Management -- SLiM, for short, since our industry loves acronyms. SLiM is a new, integrated commercial semiconductor and military/aerospace OEM business model. It supports long-term product and service supply requirements while creating new revenue opportunities for commercial IC manufacturers. It makes platforms viable far longer than the ICs used in them are generally available.
This new approach comprehends the eventual need for sustained system support. It accepts this and paves the way for a seamless and economical transition following cessation of commercial device availability. Itís a rational, orderly, predictable, and strategic approach to solving the secure continuity of supply challenge.
SLiM differs from OM because it proactively plans for long-term supply by creating relationships, investments, and service capabilities long before a key device, like a microprocessor, is approaching the end of its commercial run. It prevents what can become dire supply/demand/cost problems by arranging for secure supply before problems arise.
A further benefit is avoiding traditional supplier practices and the mayhem associated with price inflation, radically escalated system support costs, and having to scour the market for the last available parts. SLiM doesn't merely "mitigate" obsolescence, it anticipates and eliminates it.
Also key is realizing this marketís value by commercial IC makers. Proactive business engagements and partnerships are important elements ensuring secure continuity of supply. They allow creating advance pricing schedules without the financial and potential quality surprises inherent in a spot market. Players engaging in SLiM will cost-effectively acquire supplies of the essential packaging materials as well as resources for continuing manufacture, assembly, and test. Timing is key. Getting into SLiM early is essential. Getting in late is business as usual.
A manufacturing process based on wafer banking is also key. It is one of the safest, easiest, and most cost-effective ways of extending semiconductor lifetimes. However, it sacrifices efficiency without integrated, captive, secure facilities to assemble and test products to military/aerospace standards.
This is particularly important for components using older technologies where processes and equipment must be maintained to support them. Uninterrupted, secure supply -- including quality levels, high-reliability packaging types, and warrantees -- creates the desired net effect.
SLiM manages secure continuity of supply for as long as customers require the components. This is SLiMís singular market value to aerospace systems OEMs. It is the way the game needs to be played.
ó Joe Bronson is Director of Business Development at e2v Aerospace & Defense, Sunnyvale, Calif. He was previously president of Sanmina-SCI Corp. (Nasdaq: SANM), a leading electronics contract manufacturer.