Size matters when specifying passives
Author : David Pearson, Technical Director at Anglia Components
03 December 2018
Currently, we are seeing a mismatch between the sizes that component manufacturers prefer to produce (0201 and below) and the sizes that most distribution customers are comfortable using (0402 and above). This piece examines the reasons for this, and the ways in which component users can respond to maintain continuity of supply.
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Why are larger sizes being discontinued? Overall, there is a long-term trend for manufacturers to discontinue, or make fewer batches of, the larger sizes of chip passives (1206, 0805 and 0603), as the volume consumer markets (such as phones, tablets and IoT devices) have already moved to 0201 size and smaller. We are already witnessing a managed obsolescence programme on some of these larger chip sizes, where capacity is being severely restricted.
Another issue is that larger sizes consume more material and production capacity at a time when there is a shortage anyway. In the past, component manufacturers have responded to increases in demand and shortage situations with a continual programme of size reduction. This has allowed them to increase output using existing facilities and equipment.
For example, historically, the reduction in size from one platform to the next more than doubled production yields for the equivalent amount of raw material. That avenue is now running out of steam: for instance, the latest size reduction from 01005 (0.4 x 0.2mm) to 008004 (0.25 x 0.125mm) yields only a modest increase in production capacity, and certainly not to the same levels previously experienced. In short, there is an active disincentive for manufacturers to produce the larger sizes.
Globally the largest percentage, by volume, of the chip passive market use 0201 size and below – so it is no surprise that manufacturers are increasingly reluctant to commit scarce capacity to produce larger sizes, given the relatively small demand that remains.
How should component users respond?
Currently the sweet spot for the industrial market, as we see it, is at 0402 and 0201 – and these are the sizes that Anglia currently recommends for new designs. Larger sizes are nominally available, but we don’t recommend that they are used in new designs. Otherwise, we fear that customers will be caught in an endless cycle of lengthening lead times, restricted capacity and rising prices, as larger sizes become increasingly scarce.
We also recommend that customers move current designs to the smallest sizes available in the value and voltage required, and to design out larger sizes at the earliest opportunity – certainly the next time a product is redesigned.
There is a strong case for redesigning boards just to get rid of the larger chip passives. We recognise that there is very little ROI on such an exercise in terms of materials costs: passive components are typically the smallest percentage of the overall material cost, and the savings achieved are unlikely to pay for the work involved by themselves. However, the other associated benefits of a redesign can provide the requisite financial justification.
If you have your own buffer stock, manage it intelligently: make sure that you know what you have. Anglia 80/20 is a scalable VMI service to allow customers to hold on-site buffer stock on a pay-per-use basis – and track their component usage in real time on the web.
Replenishment is automatic, in line with an agreed formula: in an allocation situation, Anglia 80/20 adapts automatically to extending lead-times and available component inventory levels – ultimately telling the customer and distributor exactly what they need to know to manage the situation.
Conclusion
As manufacturers discontinue or reduce production of larger size chip passives, component users need to look at their options to ensure they don’t get caught out with stock shortages and unworkable lead-times. Buyers should consider moving to smaller sizes, such as 0402 and 0201, for current and new designs, if they work within necessary voltage and value requirements.
Logistics in electronics manufacturing is uniquely challenging. If an electronics manufacturer can’t source a key component (even a humble chip capacitor, which can typically cost less than a grain of rice), then their product can’t be manufactured or shipped – meaning the company involved sees no revenue, but still incurs costs.
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