6 Ways to Avoid Component Obsolescence Costs

In 2023, component obsolescence affected approximately 473,000 parts (Z2Data, 2023) with the three main drivers of obsolescence being low market demand, low-cost competitors and government regulations.

Component obsolescence is when a part is no longer manufactured by its Original Component Manufacturer (OCM). Component obsolescence affects hundreds of design engineers and buyers throughout the power electronics industry every single year.

The most common semiconductor components to be affected by component obsolescence are diodes, thyristors, thyristor/diode modules and IGBTs.

GD Rectifiers has been helping customers source end-of-life and obsolete power electronic components for over 60 years. We work closely with customers to develop a sourcing strategy suitable for your project and requirements. Our expert sales team are best placed to offer component alternatives based on project longevity, component availability and pricing.

The 6 best ways to avoid component obsolescence costs:

1. Consider obsolescence management at the design phase

Choosing the right component technology and distributor can impact long-term availability and project success. It’s important to consider that the lowest cost sources may not always be the best long-term supply choice.

Key considerations for obsolescence management at the design stage:

• Is the component’s lifecycle likely to be available throughout the application’s lifetime?
• Are the designer’s key components listed and has this component been identified as a key component?
• Will the original design files be retained in case the design needs rebuilding in future?

      2. Estimate the total cost of obsolescence

Like with any new design project or build, it is important to understand and compare costs and risks associated with component obsolescence. With component obsolescence being more common these days, obsolescence is a risk that designers need to factor in from the offset.

Key considerations for estimating obsolescence costs:

• Will there be a project redesign or refresh during its lifetime and if so when and how will it be funded.
• What will the component obsolescence impact be on after-sales?
• What effect would a shortened product lifecycle have on the OEM, customers and end-users?
• How would the OEM account for capital tied up in long-term component sourcing and designing in new components due to obsolescence?

  3. Plan for obsolescence and resource management

Obsolescence is inevitable these days, OEMs should proactively plan for component obsolescence. Large OEMs will devote skilled multi-disciplined workers to obsolescence management because preventative planning is much more time and cost effective whilst eliminating unnecessary risks.

Key considerations for obsolescence review and management

• If in-house resources are limited, task your distributor partner with notifying you of any component obsolescence that may affect your project. Whilst it might not always be possible for distributor to notify you of every PDN, send through a priority list for your key projects
• Follow component manufacturers closely and look out for PDNs or product supply chain updates

     4. Identify and monitor PDNs

Customers should proactively monitor product discontinuation notices and keep up to date with component lifecycle problems.

• Contact your distributor, discuss component sourcing options and decide the best cause of action
• Decide whether a last time buy or designing in a new component is the preferred option. Distributors are best equipped to offer alternative replacement parts already in circulation and have most likely already offered another customer the same alternative

    5. Utilise last time buys

Last time buys are unexpected and cannot be incorporated into forecasts, and it is extremely difficult to predict product needs months or even years in advance or to foresee market disruptions. Underestimating risks can prematurely terminate a product and overestimating requirements can tie up unnecessary capital in stock and storage costs. If a future redesign is planned to limit LTB costs, then the design, requalification and opportunity costs of engineering resources need to be factored in to conclude overall project costs.

Key considerations for last time buys:

• How many components are available through placing a last time order, and how much coverage would this provide?
• Is a redesign imminent within the next 18-24 months? Would the last time buy satisfy the usage requirements until a redesign?
• Compare overall costs of designing in a new component now, compared to placing an LTB.

6. Purchase from authorised sources

There is a big misconception that once a component is made obsolete, that an unauthorised or grey market supplier can still provide the part. In fact, it is quite common for a distributor that has placed significant orders for a selected part with a good relationship with the manufacturer, for them to be able to continue ordering the discontinued part exclusively, if the demand is high enough.

Counterfeit parts poise a great risk to engineering production with increased mean time between failure rates (MTBR) in the field.

Key considerations before buying from unauthorised sources:

• Cheap components usually mean counterfeit goods with poor handling, resulting in ESD damage and device destruction
• Risks of poor storage can lead to external lead corrosion, failed solderability, moisture ingress and a catastrophic device failure

Fully authorised distributors like GD Rectifiers are ISO 9001 compliant and are authorised by the OCM to provide traceable and guaranteed products with no quality or reliability testing required because the parts are sourced directly from the Original Component Manufacturer (OCM).

At GD Rectifiers, we offer on-going technical support and solutions to sourcing components and are experts in component obsolescence. We hold inventory in the UK and stock an extensive range of power electronic components including semiconductors, circuit protection devices and passive components. We work closely with our entire network of OCMs to ensure we continue servicing our customers during component sourcing and component obsolescence stages.

Stay ahead of component obsolescence and redesign your builds by reading all the latest Product Discontinuation Notices (PDNs) on our blog. We work with customers to secure a last time buy, a modern-day replacement or often designing in a new part.

Just found out that your component is going to be discontinued? Contact our sales team today to secure a fast, cost-effective replacement on 01444 243 452 or email [email protected] or visit our component obsolescence page on the website.