Licensed manufacturing can beat your lifecycle challenges

The challenge of semiconductor obsolescence persists, and the rate of end-of-life (EOL) notices is not likely to slow anytime soon. The semiconductor industry’s push toward consolidation, combined with significant investments in advanced chip manufacturing, creates hurdles for those depending on a steady, long-term supply of specific older components.

Many original equipment manufacturers (OEMs) require parts long after those same parts become financially unfeasible for chip producers to continue manufacturing said parts. When this mismatch in lifecycles occurs, resourcefulness is crucial. Partnering with an authorised distributor offering comprehensive obsolescence solutions, such as licensed manufacturing, to develop a tailored strategy for a specific part can be a game-changer in reducing obsolescence risk

As chipmakers adopt newer technologies, more devices reach EOL, leaving customers in a difficult position. An EOL announcement triggers a wave of uncertainty: Where can we source this part quickly? Is there another supplier? Do we need to redesign or requalify a different component? Extended manufacturing presents a strategy that offers a fresh perspective on the challenge of obsolescence. It benefits OEMs, original component manufacturers (OCMs), and the licensed manufacturer alike.

This win/win/win scenario warrants closer examination. For OCMs, outsourcing the production of older technologies to a licensed manufacturer allows them to focus on innovation without abandoning customers who rely on legacy parts. OEMs are assured of a dependable, cost-effective supply of components that are identical in form, fit, and function to the original devices. This approach often eliminates the OEMs need for expensive redesigns or requalification, saving time and resources while preserving product integrity. The licensed manufacturer strengthens its position as a trusted leader in extended life manufacturing by providing tailored solutions that address challenges related to obsolescence.

The key is finding a business case that benefits all parties. For commodity parts like memory or standard logic, extended manufacturing might not offer a favourable cost-benefit analysis due to readily available pin-compatible replacements. But in plenty of other cases, it’s a smart move. A third party can team up with the original component manufacturer to produce a part using the same wafer foundry, assembly, and test facilities. Whether the EOL stems from an outdated wafer fab process, packaging, or test platform, extended manufacturing shines in scenarios like:

• High value, low volume: customers needing a small batch of high-value parts
• Low value, high volume: customers requiring thousands of low-cost semiconductor parts
• Unique footprint: parts with a specific pin-out that can’t be swapped for a drop-in replacement
• Long-term needs: products that will require component supply for years to come

Customers often overlook extended manufacturing due to misconceptions. Some OEMs worry about the quality of third-party-built semiconductors. When done correctly, extended manufacturing uses the same manufacturing flow, foundries, mask set, assembly, and test house as the OCM. Besides the manufacturer’s logo, the resulting electronic components are identical. Others question extended manufacturing’s financial sense. In some cases, costs may be higher per part. However, it is often more cost-effective to use an extended manufactured part than the complexity and expenses involved in a redesign. In the right context, extended manufacturing is a better solution. When there’s no drop-in replacement or secondary source of supply, extended manufacturing offers a long-term alternative for semiconductor device supply, often supporting OEM’s component needs for decades. Some may see it as untested, but it has a proven track record. For example, Flip Electronics Manufacturing Services has been a successful licensed extended life manufacturer for over 10 years. In a world where product lifecycles are misaligned, partnering with extended-life licensed manufacturers helps extend product lifecycles and prevent obsolescence, often being the best solution for OEMs to bridge the lifecycle gap.

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