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Get Strategic With Military/Aero IC Supply Challenges

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. What’s 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.)

I’m 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. It’s 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 market’s 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 SLiM’s singular market value to aerospace systems OEMs. It is the way the game needs to be played.

— Joe Bronson is Director of Business Development at e2v Aerospace & Defense, Sunnyvale, Calif. He was previously president of {complink 4773|Sanmina-SCI Corp.}, a leading electronics contract manufacturer.

4 comments on “Get Strategic With Military/Aero IC Supply Challenges

  1. stochastic excursion
    December 15, 2010

    Sounds like a way to buy some vertical integration.  Does this process include incentives for systems engineers to upgrade their designs for components that are being phased out?  Maybe that's the tail wagging the dog in an industry where requirements “flow-down” is the norm.

  2. SP
    December 15, 2010

    Its sounds correct that SLiM is the way electronics supply chain game should be played. Especially in defense designs that are for national security lifecycle management must be the indespensable part of the game. I guess many companies shy away from OM or SLiM because they dont realize how big is the problem obsolescence can cause unless they see when the problem is right on their doors and their critical part of the design is obsolete. I myself have handled OM for big product companies and seen how this issue was kept ignored untill it becomes a reality.

  3. Barbara Jorgensen
    December 16, 2010

    It sounds like SLiM is a win-win. Is there any resistance to the concept in the industry? If so, what's the argument? As long as everyone stands to make some profit in the equation it's a viable option.

  4. elctrnx_lyf
    December 17, 2010

    This definitely seems to be an idea. But even now and in the past finding the right business partner is always part of any aerospace project with respect to the critical components used in the products. Most of the designs will actually use the component that gets the assurance of long-term availability from the semiconductor manufacturer. The idea of SLiM is good but this have to bring together the mil/aero OEM's and the component suppliers under one roof and form a community to coexist. At the end I feel obsolescence is something what u cannot evade but it is a matter of how long OEM's can actually use the same design. One more point is change is inevitable, it is not just the components at certain point we have to redesign due to the other systems that actually gets connected and may also have to add some features.

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