Three Tips To Overcome The Semiconductor Shortage In IoT

Anticipation is the number one key to dealing with the shortage of components, which could continue until 2022. But you also have to know how to take risks. Much has been said about the semiconductor crisis for shutting down several global auto factories. But it extends beyond vehicles and affects since January 2021 all sectors of electronics, including IoT. And all the components are affected by the shortage (semiconductors, microcontrollers, chips, diodes, etc.).

“We use the same components, and we call on the same manufacturers, so we are just as affected.” As a reminder, the semiconductor crisis is due to the accumulation of a series of factors: the confinement linked to the health crisis, which led to the closure of production plants for several weeks, the increasing demand for electronic equipment (computers, game consoles, etc.) but also the deployment of 5G infrastructure and the rise of electric vehicles which require three times as many components. Not to mention the weather conditions experienced in Asia and that semiconductor manufacturers “usually work in lean, which takes the time to relaunch production. ”

Place An Order According To The Objectives

In the IoT, to face this situation, three organizational elements are essential. First and foremost: anticipation. The actors interviewed all recommend placing orders in advance and positioning themselves according to their objectives. Noten, for example, has secured tens of thousands of pieces from November 2020 to fulfill its demands until the end of 2021 and has already made reservations for 2022 at the beginning of May.

“It is a reflex to adopt that is not natural but essential to ensure its activity. ow, we have to do it over more than a year because we have very high volume deployment projects, and if we find ourselves without a component, it can stop dead. “This need for storage nevertheless induces a drawback, namely a greater exposure to speculation.

“Prices have increased on average by 5 to 30% among distributors, but in a minority of intermediaries, prices are multiplied by five,”. An increase that is cumulative with that of transport costs. “Air costs have climbed 50% since the start of the health crisis and maritime costs by 30%”. The consequence for end-users: their products in turn risk unavailability and see their prices rise.

Limit Components With A New Design

Second flagship tip: rework product design to limit references and use interchangeable components. “Reworking the design of products in R&D makes it possible to limit the references and replace certain components.” The company that designs intelligent thermostats: the components used all have an alternative. In this regard, the Ansys group highlights the advantages of simulation. “Checking operation and safety can be done by simulation to accelerate the marketing of products.

However, with the economic crisis, capturing market share is essential”, particularly with STMicroelectronics on the simulation of physical phenomena impacting components. Here again, this option on the design implies a flip side, namely the certification deadlines. Integrating a new feature requires nearly three months, the time to “make prototypes, test them, submit them to CE validation.

Involve Customers

Finally, the last tip: make customers aware of these issues. “We must exchange more with them, explain to them why we risk being late if they do not get involved in their projects as soon as possible.” on the one hand with subcontractors to list the components available, on the other hand with customers to determine future annual consumption volumes.

“In the IoT market, there are still a lot of variations in terms of volumes and types of product, but right now, you have to take risks.” These procedures are all the more critical to the depth as they will make it possible to overcome future hazards. Already, this crisis “will probably last in the best case until early 2022”.