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Components Direct offers guaranteed traceable E&O inventory!


Components Direct is a leading source for authorized end-of-life and excess electronic components. The products are guaranteed grade A factory sealed direct from the manufacturer and inventoried in a ESD 20.20 certified and ISO 9001 certified state-of-the art-facility. Components Direct is headquartered in Milpitas, CA with locations in the US and Asia.

It has a leading cloud-based platform for excess and obsolete (E&O) inventory. In 2012, Avnet and Components Direct entered in a strategic relationship. Components Direct is the exclusive channel for Avnet’s factory authorized excess and end-of-life components.

Compared to leading industry giants, such as Element14 and RS Components, Components Direct, currently, doesn’t have a detailed menu showcasing listed products, at least not on the home page, as yet. One hopes that’ll make an appearance soon.

Speaking on the mission of Components Direct, Anne Ting, executive VP, Marketing said: “Components Direct is the premier authorized distributor for excess and end-of-life electronic components. We are the only company working directly with manufacturers and their franchised distributors to offer 100 percent guaranteed traceable E&O components as well as technology services to combat counterfeit components and other gray market activity.

“For our supplier partners, we enable them to put excess product back into the control of an authorized source, as opposed to the gray market. For buyers, we provide them with a secure, authorized one-stop shop for excess, obsolete and unsold factory components.”

Combating gray market
How important is it to combat the gray market? Why will this endeavor stop/lessen gray market activity?

According to Ting, the gray market is a serious and growing problem. As early as 2008, a study by KPMG and the Alliance for Gray Market and Counterfeit Abatement (AGMA) stated that as much as $58 billion of technology products were passing through the gray market, and the problem has only gotten worse.

The gray market is rampant throughout all industries, with everyone from engineers, to procurement professionals and consumers impacted negatively when the products they purchase are advertised as new and authentic, but in reality could be used, refurbished or even worse, counterfeit.

In fact, a 2012 study by market research firm IHS found that over 12 million counterfeit electronics and semiconductor components

Anne Ting

Anne Ting

have entered the distribution chain since 2007, with 57 percent of all counterfeit parts obsolete or end-of-life components. Many of these parts make their way into mission-critical industries, such as defense and aerospace, where a malfunctioning counterfeit part can mean the difference between life and death.

While provisions in the 2012 National Defense Authorization Act have enabled the government and trade groups to make some progress towards regulating the supply chain to ensure that components are only sourced directly from the manufacturers or their franchised distributors, the problem has not abated. The Act empowers the federal government to hold contractors financially responsible for replacing counterfeit products.

This, together with other changes, puts more responsibility on suppliers of electronic component to have risk mitigation procedures in place. The issue is become more topical and the industry must act in order to comply with the new legislation.

Components Direct takes this problem seriously, and provides supplier insights and tools to help combat gray market activity. In a recent study we conducted for a leading semiconductor supplier of both analog and digital devices, we discovered that over 124 million units of their product were floating in the gray market across 6,500 plus part numbers.

Over 70 percent of the products were found in Asia, and 20 percent also appeared in both North America and EMEA. The product age spanned many years with date codes of less than one year accounting for 22 percent of their gray market product. A further 5 percent had date codes over 11 years, demonstrating that whether you were an OEM looking for the newest product, or a military sub-contractor looking for obsolete components, no end customer is immune to the presence of unauthorized product.

Components Direct’s technology tools and services track gray market activity and provide suppliers with unprecedented visibility to their product leakage in the gray market by part number, region, data code etc. This data enables our suppliers to trace leakage in their supply chain and lessen potential unauthorized product from getting into the gray market.

Additionally, Components Direct provides suppliers and buyers with a secure, factory authorized channel for selling or purchasing 100 percent guaranteed traceable components. “We only sell products that come directly with manufacturers or their franchised distributors and all our products are inventoried in an ESD 20.20 and ISO 9001 certified facility,” said Ting.As an extension of the manufacturer, Components Direct provides the supply chain buyer with complete confidence and peace of mind that all products originate directly from the manufacturer and have been properly stored, handled and packaged. Sourcing from an authorized source like Components Direct eliminates the risks surrounding product quality, reliability and liability. Read more…

Semiconductor supply chain dynamics: Future Horizons @ IEF2011


The last decade heralded a dramatic transformation in supply chain dynamics, driven by the complexity challenge of staying on the More Moore curve. On the demand side, the high cost of fabs persuaded almost all integrated device manufacturers (IDMs) to use foundries for their leading-edge wafer supply.

The ever-increasing process complexity and its negative impact on manufacturing yields forced the adoption of sophisticated foundry-specific design-for manufacturing (DFM) techniques, effectively committing new chip designs to a single foundry and process.

At the same time, the industry adopted a much more cautious lagging rather than leading demand approach to new capacity expansion, resulting in under-supply and shortages in leading-edge wafer fab capacity. To make matters worse, the traditional oxide-based planar transistor started to misbehave at the 130nm node, as manifested by low yields and higher than anticipated power dissipation, especially when the transistors were supposed to be off, with no increase in performance, heralding the introduction of new process techniques (e.g., high-k metal gates).

Even before these structural changes have been fully digested, supply chain dynamics have been further disrupted by the prospective transition to 450mm wafer processing, to extreme ultra violet (EUV) lithography, and from planar to vertical transistor design.

Transistor design
Since the start of the industry, adding more IC functionality while simultaneously decreasing power consumption and increasing switching speed—a technique fundamentally known as Moore’s Law—has been achieved by simply making the transistor structure smaller. This worked virtually faultlessly down to the 130nm node when quite unexpectedly things did not work as planned. Power went up, speed did not improve and process yields collapsed. Simple scaling no longer worked, and new IC design techniques were needed.

While every attempt was made to prolong the life of the classic planar transistor structure, out went the polysilicon/silicon dioxide gate; although this transition was far from plain sailing, in came high-k metal gates spanning 65nm-28nm nodes. Just as the high-k metal gate structure gained industry-wide consensus at 28nm, it too ran out of steam at the 22nm-16nm nodes, forcing the introduction of more complex vertical versus planar transistor design and making the IC design even more process-dependent (i.e., foundry-dependent). Dual foundry sourcing, already impractical for the majority of semiconductor firms, will only get worse as line widths continue to shrink. Read more…

“Look ahead” to May 2011’s predicted yearly global semicon sales: Cowan LRA model


This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.

May 2011’s “actual” global semiconductor sales is scheduled to be released by the WSTS, via its monthly HBR (Historical Billings Report), on or about Tuesday, July 5th.

In anticipatation of the upcoming May sales release by the WSTS, Cowan demonstrated an analysis capability of the Cowan LRA Model for forecasting worldwide semicon sales; namely, the ability to provide a “look ahead” scenario analysis for 2011’s global semicon sales forecast range as a function of next month’s (in this case May’s) “actual” global semiconductor sales estimate.

The detailed results of the “look ahead” analysis are summarized in the scenario analysis matrix provided in the table below. These results are also discussed in the subsequent paragraphs:

2011 May global semicon sales and sales growth scenario matrix: Cowan LRA model.

2011 May global semicon sales and sales growth scenario matrix: Cowan LRA model.

In order to demonstrate this “look ahead” forecast capability, an extended range in possible May 2011’s “actual” sales is selected a-priori; in this particular scenario analysis, a May 2011 sales range (from $23.065 billion to $26.065 billion, in increments of $0.25 billion, was chosen) as listed in the first column of the above table.

This estimated range in possible “actual” May sales numbers is “centered around” the projected May sales forecast estimate of $24.565 billion as gleamed from last month’s Cowan LRA Model run (based upon April’s published “actual” sales numbers). The corresponding May 3MMA sales forecast estimate is projected to be $25.474 billion (NOTE – assumes no, or minor. revisions in either March’s or April’s previously published “actual” sales numbers released last month by the WSTS) .

The overall year 2011 sales forecast estimate for each of the assumed May sales over the pre-selected range of ‘actual’ sales estimates is calculated by the model, and is shown in the second column of the table. The third column reveals the associated year-on-year sales growth estimates compared to year 2010’s actual sales result of $298.315 billion.

The fourth and fifth columns show the corresponding May 3MMA, three Month Moving Average, sales estimates and the corresponding yr-o-yr sales growths relative to May 2010’s 3MMA sales of $24.701 billion, respectively. Finally, the sixth column lists the model’s Momentum Indicator, MI, defined as the percentage delta between the actual May sales result and the previous month’s sales projection for May. Read more…

March’s ‘one-two-three’ calamity! What now for chip industry?


This is a summary by Malcolm Penn, chairman and CEO, Future Horizons. For those who wish to know more, please get in touch with me or Future Horizons.

 

Malcolm Penn, Future Horizons.

Malcolm Penn, Future Horizons.

It was all going so well at the beginning of March when January’s WSTS results were released. The oil and North African issues were being taken in their stride. Then, less than two weeks later, the earthquake and tsunami disaster struck Japan and by the close of the month, the Gaddafi Libyan regime was under western international airstrike siege.

Given the fragility of industry’s confidence since the Lehman Brothers crisis, the industry has weathered these ‘incidents’ with remarkable sanguinity, with concerns focused purely on supply not demand-side issues. In our view this underlines what we have been saying all along; the 2010 recovery and 2011 outlook were both stronger than most people thought.

The industry’s biggest problems in 2011 were always going to be supply not demand driven; the situation in Japan has simply amplified and accelerated their coming.

The chip industry took March’s one-two-three knocks with remarkable calm, hit first by the spike in oil prices following the politic unrest bordering on civil wars in North Africa, then the dreadful 11 March earthquake and Tsunami in Japan, culminating on 19 March with a multi-state coalition military intervention in Libya to implement United Nations Security Council Resolution 1973.

Last year, any of these events would probably have been enough to deal the industry a knockout blow, as with the September 2008 Lehman Brothers collapse; this time around, despite the still fragile global economic confidence, the industry seems to have taken these events in its stride.

Whilst it is far too early to quantify exactly what the industry impact will be, the oil price and North Africa situation pales into insignificance when compared with the aftermath of the earthquake and tsunami. Japan is too important a cog in the global electronics industry for its impact not to have serious global repercussions. It has also brought to a head the far deeper industry problems that we have long warned of – man-made in the corporate boardrooms – that could (should) have been avoided.

In this aspect, Japan’s disasters do have parallels with the Lehman Brothers collapse and its impact of worldwide finance; we hope that the current disruption to manufacturing worldwide from will force a rethink of how the world manages production. Read more…

Impact of Japan’s quake and tsunami on global semiconductor industry


It has not even been a week since the unwanted happenings in Japan. Already. there are reports of nuclear emergency! One hopes it does not turn out to be that way!!

On the semiconductor front, DRAMeXchange of Taiwan has reported that Japan’s earthquake and electrical brownouts could affect silicon wafer supply and global DRAM capacity. WitsView reported that the recovery process of infrastructure in Japan will affect the resurgence of upstream panel supply chain. LEDinside observed that the earthquake generally has not done much damage to the LED industry.

EnergyTrend reported that the earthquake in Japan has relatively slight impact on the global solar industry compared to the other industries. The supply chain sectors influenced are mainly mono silicon and poly silicon suppliers. However, it has sent out a warning: the nuclear crisis in Fukushima continues to appear unsettling. If the radiation leakage widens to Kanzai of Japan, where many solar cell manufacturers are located, the global supply of solar cells may be affected.

The more important impact may be on Japan’s production of components for LCD panels, says IHS iSuppli.

The Japanese earthquake and tsunami has also stunned the global semiconductor industry, given that Japan has been a pioneer and leader in the global chip industry.

The preliminary assessment of Texas Instruments’ manufacturing sites in Japan revealed that the fab in Miho suffered substantial damage during the earthquake. Teams are working to reinstate production in stages, reaching full production in mid-July. TI’s fab in Aizu-wakamatsu was also damaged, but already is being re-started with full production estimated by mid-April. TI’s third fab in Hiji is undamaged and running at normal capacity.

Sony Group Operations are said to have been affected by the Pacific coast of Tohoku earthquake, tsunami and related power outages. For Elpida, the Hiroshima Plant suffered little impact as it is located in Hiroshima in the southwest of Japan, However, the Akita Elpida memory plant is not in operation as of the time of the  announcement due to power shut down caused by the earthquake, and it is hoped that normal business will resume when the power returns.

Iwate Toshiba Electronics did not report any casualties, but as of March 15, there was power lost, with limited partial recovery to start from March 13. One hopes, some power has been restored. And, as of March 15, 12:00pm, seven factories out of 22 of the Renesas Group’s factories in Japan have temporarily shutt down production.

The Shin-Etsu group reported that as of 1pm,, March 15 (Japan Time), necessary inspections were being carried out at Shin-Etsu Chemical Kashima Plant (Kamisu, Ibaraki Pref.) and Shin-Etsu Handotai Shirakawa Plant (Nishigo Village, Fukushima Pref.), both of which were out of operation.

It is implementing inspections of the facilities and equipments at the both plants putting the utmost priority on safety. However, damages were founded at some production equipment at the both plants until now. At present, it is still unclear how long it will take to restore such damaged equipments and facilities at the both plants.

Mitsui Chemicals Group reports the following effects of the Kanto-Tohoku earthquake on its operations.Operations at the Kashima Works (Kamisu City, Ibaraki Prefecture), has been suspended since the earthquake. Operations will be resumed after assessment of damage by the earthquake and tsunami.

At its Ichihara Works (Ichihara, Chiba Prefecture), production at ethylene plants is according to schedule. However, the operations at Mitsui DuPont Polychemicals and Chiba Phenol plants have been suspended since the earthquake. After assessing effect of scheduled “rolling” blackout, operations will be resumed.

At the Mobara Branch Factory (Mobara City, Chiba Prefecture), operations at acrylamide and paint toner binder resin plants have been suspended since the earthquake. After assessing effect of scheduled “rolling” blackout, operations will be resumed. All other facilities are operating according to schedule.

Japan has the enviable track record of bouncing back from adversity. Let’s all hope and pray for an encore!

Chip market outlook: Back to normal abnormality? — Malcolm Penn @ IEF2009, Geneva

October 1, 2009 1 comment

Malcolm Penn, Chairman & CEO, Future Horizons.

Malcolm Penn, Chairman & CEO, Future Horizons.

Future Horizons has revised its 2009 global semiconductor industry forecast to -14 percent growth (+/- 2 percentage points). This was revealed by Malcolm Penn, Chairman & CEO, Future Horizons, while delivering the company’s forecast at the ongoing 18th International Electronics Forum (IEF) 2009 in Geneva, Switzerland, which ends here tomorrow. “He said, “It’s all about good management … only the bad times tell!”

Some of Penn’s other forecast summaries include:

* Economic recovery is said to have already started from 2H-2009.

* Further ‘50 percent’ cap ex reduction.

* Memory price recovery 2H-2009.

* Still lots Of blood on the road near-term

* Strong will get stronger as weak go to the wall.

* Watch for tight capacity starting 2H-2009.

* Crisis is the time to implement change (brings out the best and worst).

* R&D/new products/sound marketing will win (not counting pencils and scrapping the free coffee).

Outlook for 2010 and beyond

Penn also presented the company’s outlook for the global semiconductor industry for 2010 and beyond. These include:

* 2010: +19 percent based on: continuing recovery momentum (NB … this could be a lot, lot higher).

* 2011: +28 percent based on: peak of the structural cyclical boom (NB … this could stretch into 2012).

* 2012: +18 percent based on: normal cyclical market correction starting 2H-2012 (1H-2013?).

* 2013: +3 percent based on: market correction in full flow (NB … this could be negative).

The year 2014 could well see the start of the next cyclical recovery! Given the impending 2010 fab shortage, the upside for 2010-12 is said to be huge.

The 2009 forecast – how did we do so far?

First, let’s look at the 2008 forecasts:

Q4-08 Forecast (Jan): -22.5 percent, making overall Year -2.3 percent

* Q4 (Dec) Guidance: (Intel -20 percent, Nvidia -40/-50 percent, Broadcom -20percent/-23 percent. TSMC -30 percent, Others –20/-50 percent-ish

* Q4-08 Actual: -24.2 percent, making 2008 YoY -2.8 percent (both slightly worse).

Now, on to the 2009 forecasts:

* 2009 forecast (Jan): -28 percent.

* Q1 -20 percent (continuing Q4’s decline, but at a slower rate).

* Q2 -2 percent (market settling down and decline bottoming out).

* Q3 +12 percent (normal, but slightly subdued seasonal and structural growth).

* Q4 +3 percent (normal 4th quarter seasonal slowdown).

* Q1-09 Actual: -15.3 percent (better than Jan. forecast). Jan., not March, saw start of correction to Q4-08’s over-reaction.

* Q2-09 Actual: +16.9 percent (Much better than Jan. forecast). Also, Q1 (not Q2) was the trough with a strong April-June rebound.

* Q3-09 Outlook: +12 percent (No change In Jan. or Jul. forecast). The Q2 inventory correction spurt over with ‘normal’ seasonal growth.

* Q4-09 Outlook: +3 percent (No change in Jan. or Jul. forecast). The normal 4th quarter seasonal slowdown.

2009 Forecast (Jul): -14 percent (Much better than Jan. forecast/no change from Jul.). Minor downside risks (Q3 +8 percent and Q4 +2 percent. making year -16 percent). There is a significant upside potential (Q3 +16 percent and Q4 +4 percent, making year -12 percent).

What’s changed since January’s IFS2009?

According to Malcolm Penn, Future Horizons’ ‘Rose Glass’ scenario came true! He said: “We correctly forecast the pattern of the recovery. The rebound came one quarter earlier than expected.” Given below is a snapshot of what’s happened since the IFS2009 in January.

In January, the world was reeling from Q4’s unprecedented collapse with December peppered with last minute Q4 downward guidance warnings. Everyone was affected – from Intel downward, the collapse was a total meltdown and completely across the board – covering all markets and regions.

Next, there was absolutely zero visibility into the first quarter guidance. Many firms refused to even comment. Some said, “We Simply Have No Idea!” Others offered such a wide range of options that the guidance was meaningless.

The December’s WSTS results (released early Feb.) showed December (and hence, Q4) slightly worse than the Oct/Nov momentum at -24.2 percent (vs. –22.5 percent). The March’s WSTS results (released early May) showed March (and hence, Q1) slightly better than the Jan/Feb momentum.

In brief — from meltdown (Q4-08) to stabilisation (Q1-09) and rebound (Q2-09) in three quarters — even for the chip industry dynamics, this was unprecedented, said Penn.

I will be adding more here, a bit later… stay tuned!

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