Survey: Component shortages impact product design

The global component shortage is not only extending order fulfillment and lead times, but also changing the way engineers design, according to the inaugural Avnet Insights survey on industry and market trends. A key finding indicates that design engineers are looking at new ways to get their products to market in the midst of chip shortages, resulting in new approaches to design.

According to a survey of 530 engineers in the Americas, EMEA, Asia, and Japan, 64% of respondents said their companies are designing more based on the availability of components rather than preference. The biggest impact has been on microprocessors as well as logic and programmable devices.

“When a needed part can’t be found, the first and best course of action is to find a drop-in replacement with the same functionality and better availability,” said Avnet.

But with constrained supply, engineers face challenges finding direct replacements. When design-in components are not available the survey finds that engineers use several strategies including redesigned boards (55%), pin-to-pin replacements with better specs (53%), and parts with less functionality and lower specs (35%), in addition to the drop-in replacements (49%). They also make firmware (35%) and software (25%) changes.

Avnet said these preferences vary regionally. For example, 73% of designers in the Americas are most likely to use drop-in replacements.

As things became tighter in the market, engineers were looking for redesign opportunities –‘is there a drop-in replacement’ or ‘do I have multiple suppliers on my approved vendor list,’” said Peggy Carrieres, Avnet’s vice president of sales enablement and supplier development.

There are some technologies that have a high capability of being able to drop-in and replace but other components like a microcontroller it’s very difficult to go from one supplier to another, she added. “That’s some heavy tweaking of the board.”

In some cases, switching to a different part is having an impact on design cycles, which can delay time to market and it also can add more work for engineers. For critical or strategic components these may require additional resources and time to conduct testing, approvals, and certifications, said Avnet. Not surprisingly, 40% of respondents report a major impact on design cycles, with 91% reporting at least a slight impact.

A new approach to functionality

In terms of the impact on the final product when using a replacement device, 81% of survey respondents said they need to modify the performance and functionality of the final product.

Designers are looking at functionality and cost and and how they can get that product to market and sell it effectively and competitively, said Carrieres. “So you’ve seen some industries looking at what functionality is critical, what functionality is optional, and how do they design around that.”

Carrieres noted that it is already happening in the automotive industry. She cited an example where a USB charger was designed out of a vehicle because of a lack of supply. “Things like that are nice to have but not necessarily critical to the functionality.”

She says engineers are designing very differently than before. “You used to focus on each component on the board and you’d build out the board based on the functionality. Things are much more module-based now. Also, you’re looking at sub-segments of the board so that you can swap them out,” she said.

In addition, designers are looking at the product lifecycle and they are also pulling in more of the procurement activities upfront and those gauge their decisions, she said. “You can have that flexibility to swap out a component or a module in your solution to get a longer product lifecycle and to adjust the functionality over time. We’re seeing more of that flexible approach to design.”

Product delays and rising prices

At the same time 78% of survey respondents said access to electronic components has been a “very significant challenge” due to shortages and 93% said they have experienced a major impact on longer lead times. Seventy-five percent of respondents experiencing product delays said they have lasted up to six months.

A majority of all respondents don’t expect lead times to improve. Over the next 18 months, 96% of respondents are concerned about lead times stretching out even further and prices getting higher. The survey found that 72% of engineers have already experienced higher prices.

Carrieres said Avnet’s technical teams help with solving some of these challenges but it also requires “flexibility in the design and having multiple vendors on your approved vendor list,  so when you’re building out that bill of materials you have options.”

In conversations with customers over the past several weeks, she noted that some are returning to the A/B design approach to build in risk mitigation. This gives designers the option to swap out to a new design in production if necessary.

“The reality of the market today is because there’s such an impact on the supply side we don’t have free-flowing supply right now so you have to build in flexibility to mitigate risk,” said Carrieres. “It’s just a different approach to looking at having that security in your product lifecycle, so it’s really a response to the changing dynamics of the market.”

Designers also have been looking for other ways to source parts, such as through the broker channel. However, they have concerns about counterfeit control, according to survey respondents.

Engineers also noted that they are working with distributors to address the counterfeit concerns. Eighty-three percent of respondents said they are working with distributors to reduce the chance of getting counterfeit parts. However, 76% also said they expect counterfeit components to increase.

With a  new normal of searching for available parts, modifying designs, and looking for ways to mitigate the chance of counterfeits making their way into their designs, engineers are working on several strategies to deal with the shortages, including increasing their buffer stocks, expanding their supplier base, and changing the way they approach design.

Carrieres doesn’t think component shortages will end soon due to a convergence of “catalysts,” including demand, supply capacity, logistics challenges, and now geopolitical issues, in addition to industry megatrends like electrification.

“This industry is becoming so much more complex,” said Carrieres. “You need partnerships across the end-to-end design supply chain because there are so many different players across the full spectrum and those partnerships are really important.”