The Imminent Tsunami of Obsolescence After the Shortage

Over the past two years, market conditions completely changed standard processes and procedures for OEMs, forcing them to understand their supply chain in an entirely new way. Historically, they may have received a finished board and placed it in their product without further thought. Now, they are aware of the individual semiconductors and how the availability of those small parts has a huge impact on their production schedule and cost.

Already preoccupied with the immediate shortages, many are not paying attention to the tsunami of obsolescence that’s coming. Verticals stretching the gamut including new markets like 5G, AI, Electrifications and EV will feel the crashing waves of EOL parts, in the same way that more traditional markets do.

“Companies who haven’t needed to be as concerned with obsolescence will have the rug pulled out from underneath them,” says Warren Shore, Business Development at Converge. “Since they aren’t in a high-reliability sector, like defense or medical, they may not have the familiarity or strategy to handle the wave of EOL parts that will be coming.”

When this shortage market normalizes, suppliers will make decisions that will set off the next blow to supply chains; mergers and acquisitions, buyouts, a rise of PCNs, and ultimately EOL notifications on less profitable lines.

Data, visibility, and partnering with supply chain experts are paramount to building strategies to manage the imminent risk of obsolescence. Companies can position themselves better by educating themselves on everything involved in their supply chain down to the bare boards to minimize the effects of looming obsolescence.

Contact Converge and the FOM team to find out more.

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