On the Flip Side

Does purchasing a semiconductor from an unauthorized source of supply and having it tested at an independent lab provide the same level of quality as purchasing from an authorized source of supply?

Does purchasing a semiconductor from an unauthorized source of supply and having it tested at an independent lab provide the same level of quality as purchasing from an authorized source of supply?

In a recent webinar hosted by Procurement Pro, a group of industry experts gathered together to discuss how the US tariffs are reshaping the electronics supply chain.

At Flip Electronics, we believe in "Making Obsolescence Obsolete." While technology evolves and components reach the end of their lifecycle, we have developed a twofold strategy to address this challenge.

With all the attention swirling around advanced technologies, it’s understandable that product designers and engineers find the temptation to default to next-generation components almost irresistible. But the Next Big Thing isn’t always the Next Necessary Thing, even with competitors lurking in every corner. Winning in the market isn’t always about being at the bleeding edge—it’s about addressing customers’ pain points with solutions they can afford to deploy.

Does purchasing a semiconductor from an unauthorized source of supply and having it tested at an independent lab provide the same level of quality as purchasing from an authorized source of supply?

The tariff landscape is evolving daily under the current U.S. administration, and no one knows where we will be when things calm down. It’s fair to assume, though, that tariffs will exist and that purchasing pros will need to stay informed about how these changing financial realities may need to be addressed. 

With ongoing technological innovation, manufacturers in the aerospace, automotive, industrial, and medical sectors who design products for long-term use often face production and repair challenges as semiconductor and other electronic component manufacturers phase out essential parts. These challenges are not only disruptive but often unavoidable, as component manufacturers prioritize new product development, leaving manufacturers to navigate the complex and resource-intensive process of sourcing replacements. 

The looming likelihood of new, incremental tariffs designed to balance global trade in essential industries has prompted manufacturers, suppliers and customers alike, to consider contingency plans if their supply of raw materials, parts, and electronic components are disrupted or become too costly. Navigating these complex and evolving tariff dynamics can be challenging to plan for, but manufacturers can take proactive steps to prepare for potential changes and mitigate risks.

Few industries evolve faster than technology. The rapid pace of innovation, increasing complexity and an insatiable desire for ever-more-advanced semiconductors is enough to keep any electronics purchasing professional up at night—especially those dealing with the impending obsolescence of critical components. Semiconductors that are essential to a product’s design and functionality may eventually be discontinued, leaving manufacturers and repair professionals scrambling to find alternatives.

Some pundits are a bit lukewarm in making predictions for the electronics industry for the coming year. Moderate growth at best some say. However, my stance is more bullish. 2025 is going to be a good year—and 2026 will bring our industry unmatched success. The industry has learned some lessons about the need for resilience and diversification. New technologies such as artificial intelligence are pushing things forward both in terms of supply chain technology and technology trends.  Stable markets are likely to stay stable and high-growth markets will do better than we expect.

For at least eight quarters, pundits and market watchers have been trying to call the bottom of the dip for the electronics industry, without success. In the fourth quarter of 2024, though, we've finally hit the bottom of the cycle for the industry at large. Signs are pointing to a return to growth in the coming year and a blockbuster year in 2026.  

The electronics market has faced its fair share of challenges in recent years. We've gone from product shortages on critical components, resulting in record-breaking lead times, to excess inventories that are taking multiple years to absorb. Manufacturers have struggled with slim margins and slow or negative growth rates. But as we look toward 2025, there's finally a reason to feel optimistic.

Original equipment manufacturers (OEMs) in the aerospace, medical, automotive and industrial sectors are confronted with the critical issue of shrinking component lifespans impacting the longevity of the equipment they’re incorporated. Flip Electronics’ expansion across EMEA will bring critical expertise in obsolete and end-of-life semiconductors and electronic components to OEMs looking to efficiently source factory-authorized electronic components that enable them to reliably and effectively extend their products’ lifecycles.

Flip Electronics has emerged as one of the fastest-growing authorised distributors by effectively tackling the longstanding challenge of product obsolescence customers and suppliers face. The rapid pace of technological advancements often results in the abandonment of older components. However, product obsolescence poses a significant concern for sectors such as military, aerospace, and industrial, where product lifecycles frequently span 10 to 25 years. Flip Electronics has flipped the obsolescence model on its head, embodied by our motto, ‘Making Obsolescence Obsolete’.

In the electronics sector, semiconductor cycles—both up and down—reflect a natural pattern. During prosperous times, allocation difficulties arise, causing OEMs to scramble for the necessary part numbers to develop their products. Some resort to untested and unfranchised sources to meet their demands. This practice increases the risk of counterfeit or compromised components infiltrating the final application, ultimately jeopardizing the product’s integrity. All these efforts are made with the genuine intention of keeping manufacturing active.

The aerospace and automotive industries rely on technology to ensure performance, safety and longevity. With advanced systems such as avionics, braking systems, autonomous driving modules and engine control units (ECUs) forming the backbone of these sectors, counterfeit electronic components present a significant risk.

Medical devices don’t come cheap. With MRI machines, PET/CT scanners, surgical robotics and other technologically sophisticated equipment running into millions of dollars, healthcare providers are keen to use them as long as possible. It’s a targetrich environment for counterfeiters who know they’ll be in the market for repair and replacement parts when a component fails—most inconveniently after the component manufacturer stops production.

Supply chain cybersecurity tends to sometimes take a back seat to other critical business activities. Then something hits the headlines—and electronics OEMs are reminded that they are a juicy target for cybercriminals. They are really good at what they do and they are getting better.

Teledyne e2v HiRel Electronics, a leading provider of high-reliability semiconductor solutions, announced a new partnership with Flip Electronics, a prominent distributor based in Alpharetta, Georgia.  Under the new agreement, Flip Electronics will maintain substantial inventories of Teledyne e2v HiRel’s semiconductor wafers for military applications, ensuring a consistent and reliable supply of critical components.