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No Risky Business: Eliminating the Dangers of EOL Device Procurement

Tue, 02/15/2011 - 10:31am
George Karalias, Rochester Electronics

In the past, there were only two end-of-life (EOL) solutions available to procurement professionals: make a one-time, last-time purchase from the original manufacturer, or purchase residual inventory through distribution. A last-time buy can be a significant financial burden on current operating costs as well as R&D budgets. The likelihood of receiving substandard and/or counterfeit components on the gray market has always been very high; but today the risks are greater than they have ever been, and they are escalating on a daily basis.

Today, the only safe procurement source is an authorized distributor. The primary objective of procurement professionals is to sustain an uninterrupted supply of parts for projected manufacturing schedules and field maintenance and repair services. They must find a method to maintain the supply chain while avoiding the pitfalls of buying hard-to-find, critical devices through the risky gray market.

Substandard and Counterfeit Components Cause Compounding Problems
Gray market purchases come with too many risks. Gray market distributors cannot guarantee authenticity, quality, traceability, reliability, or continuous availability of parts. Additionally, there is no easy way to be sure that the devices been properly stored and handled so that quality and reliability have been preserved. Counterfeiting – the fraudulent manufacturing, distributing, and selling of fake or replica semiconductors – is a growing problem throughout the electronics industry. As counterfeiters become more sophisticated, more and more companies are receiving re-marked devices with falsified part numbers or company logos, empty devices with no die, falsified RoHS compliance paperwork, and counterfeit chips. Take a quick look at www.authorizeddirectory.com and see the most recent stories on counterfeit events affecting the electronics industry.

The use of counterfeit and substandard devices has far-reaching negative consequences, not the least of which is a negative reflection on reputable component manufacturers and distributors. In addition, they cause purchasing dilemmas for component buyers and production delays for equipment manufacturers. If the defective parts make it into the field, end users experience equipment failures. For mission-critical applications such as military, medical, and aerospace, faulty equipment can result in loss of life. These failures damage the credibility of the equipment manufacturer. In worst-case scenarios, counterfeit components can cause legitimate manufacturers to be driven out of business.

Avoid the Risk
To limit risk when purchasing replacements for semiconductors no longer available from the original manufacturer, consider cost instead of price. At a bargain price, available semiconductor devices from an unauthorized source can result in much higher overall cost, including manufacturing downtime and/or failure of the end-product should the part be faulty or counterfeit. These costs far outweigh the front-end savings, the damaged reputation of the company, and the increased costs to all participants in the supply chain.
Determining whether or not a purchased semiconductor device is authentic requires time, vigilance, and knowledge. What is the easiest, fastest, and surest way to avoid counterfeit and substandard components? Purchase from the original manufacturer, or enlist the aid of an authorized distributor. Due to the sophistication of current counterfeiting technology, there is no method of truly assuring beyond a shadow of a doubt that a semiconductor device is authentic when it is procured from an unauthorized source. Planning ahead and developing a partnership with an authorized source can ensure a continuous stream of genuine devices for the duration of the product life cycle.

The-NEW-Semiconductor-Life-Cycle

OEMs that plan ahead for a semiconductor EOL announcement early in the product design process can eliminate potential setbacks during the life of the system. Partnership with an authorized manufacturer/distributor can extend the life of a device, eliminating the need for OEMs to try to forecast last-time buy requirements or incur subsequent inventory storage costs. These partnerships also allow OEMs to bypass dealing on the risky gray market, where procuring faulty and counterfeit parts could cost millions of dollars. Planning ahead for EOL ensures there will be no interruption in the supply chain and that manufacturing can continue with traceable, high-quality semiconductors from a reliable and trusted source.

EOL Device Solutions: The Distribution Supply Chain
Through a contract, certain authorized continuing manufacturers/distributors can place devices into bonded inventory for customers. The devices are safely and properly stored in dedicated temperature- and humidity-controlled warehouses. For example, authorized continuing manufacturer/distributors, such as Rochester Electronics, offer OEMs special product agreements that can alleviate many of the problems including last-time buy and inventory storage costs that arise from unplanned EOL events. Through this type of agreement, products can then be distributed to specific customers through customized, comprehensive, scheduled, and managed programs.

If original product inventory becomes depleted during the agreement, authorized continuing manufacturers can utilize original intellectual property (IP) including wafer/die, tooling, test programs, test equipment, package design, and foundry processes to continue manufacturing the device. Since the continued manufacturing is conducted with support from the original semiconductor manufacturer, authorized semiconductor manufacturers are able to provide an exact replica of the original semiconductor device.

If the design archive and other IP are no longer available to support continued manufacturing, some authorized continuing manufacturers are capable of deconstructing and electrically analyzing a semiconductor device. Engineers re-draw / re-design the device using images from scanning electron microscopes (SEM), and re-engineer it onto a matched mature foundry process to replicate the original component. The replicated device is a pin-for-pin replicate with matched cycle-for-cycle timing, guaranteed to meet the original semiconductor’s performance in form, fit, and function. This transfer of technology offers OEMs a distinct advantage since it eliminates any potential legal issues from patent or IP infringement.

Authorized Manufacturer/Distributors Offer the Most Comprehensive and Cost-Effective Solutions
For OEM products with long life cycles, a contractually licensed, authorized continuing manufacturer/distributor offers services that ensure procurement professionals have a constant supply of critical semiconductor devices necessary to support production should an end-of-life announcement be issued. Authorized continuing manufactures/distributors offer long-term supply programs and re-creation services that provide OEMs with a never-ending supply of secure, critical EOL semiconductors, each one 100% guaranteed for integrity, traceability, reliability, and performance. OEMs save time and money, and maintain company credibility.

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