Admittedly, it is ICs that will get the majority of attention when it comes to electronic system design, with the supporting passive components too often receiving very little of the limelight. Nevertheless, their value should certainly not be underestimated.
The passives incorporated into electronic hardware have important roles to play when it comes to ensuring that the performance levels expected are actually delivered, and providing all the necessary functionality. If a specific component – no matter how small or inexpensive it may be – cannot be sourced in an acceptable timeframe, then it could have a major impact on the OEM’s production process. Existing order obligations may consequently not be fulfilled and prospective windows of opportunity might end up being missed.
Over the last 18 months, the global electronics supply chain has been through what is widely considered to be the most challenging period in its entire history. The component shortages that were already starting to be witnessed got further exacerbated by interruptions in production workflows caused by the COVID-19 pandemic.
An area that was subject to long lead times even before the arrival of Covid-19 was multi-layer ceramic capacitors (MLCCs). After a prolonged lull in demand back in late 2018 and early 2019, many manufacturers dramatically curtailed their production capacity. Since then, however, market dynamics have brought these components back into favor – with unprecedented volume requirements now being witnessed.
A report from Mordor Intelligence expects that the worldwide MLCC market, which was worth $10.3 billion in 2020, will have surpassed $15 billion by 2026. That constitutes a 5.42% compound annual growth rate (CAGR) over that period. Among the sectors that are driving demand are 5G smartphones, electric vehicle (EV) powertrains, and renewable energy generation systems.
- E-mobility and its implications
- The number of EVs on our roads is set to increase substantially during the next few years – thereby allowing society to alleviate the issues caused by carbon emissions (in relation to climate changes) and NOx (with regard to the damage this does to people’s health). If projections by the International Energy Agency (IEA) are proved right, there will be at least 145 million registered EVs by 2030. The advent of faster charging infrastructure will shorten the period in which EV batteries can be replenished.
- At the same time, the ramping up of the voltages used in EV powertrains will help to increase efficiency levels, so that greater distances can be traveled between charges. Though both of these innovations seem certain to help raise the popularity of EVs, the high voltages needed for them to be realized are going to put extra strain on the circuitry involved, leading to greater use of passive components. The EV models now coming on to the market can feature over 10,000 MLCCs, so the overall volumes that are going to be called for will undoubtedly be immense.
- 5G mobile communications
- To achieve higher data rates and greater data volumes promised by 5G networks, higher frequency bands (in the mmWave region of the RF spectrum) are being employed alongside the more established frequencies. The upshot of this is that higher-value capacitors and lower-loss magnetics will be in ever greater demand.
- IoT infrastructure
- Huge numbers of IoT nodes, counted in the tens of billions, are expected to go into operation over the course of the coming years, in order to support industrial automation implementations and smart city initiatives. This will drive demand for super-capacitors, as these can be used for energy harvesting purposes – storing the energy captured from the ambient environment by photovoltaic cells, thermal-electric generators (TEGs), etc. This will mean that costly and logistically-challenging battery replacement work can be avoided.
Redefining the passive supply chain
Facing a lack of available inventory, OEMs are currently being placed under incredible pressure. Ways need to be found to mitigate supply shortages and reduce the lead times involved. To do this OEMs must start working more closely with their distribution partners.
Moving forward, the “just in time” manufacturing culture that has built up over the last decade will no longer be applicable. Instead, the engineering and purchasing departments of OEMs will need to be much better prepared. This will mean that they can avoid the risk of having to make unwanted changes to product designs, due to required quantities of a constituent component being too difficult to obtain – and not be hit by the heavy expense associated with such undertakings.
If they have greater visibility of what their passive requirements are likely to be in the medium and longer-term, then they can successfully plan ahead. Also by entering into consultation with their preferred distributor, they will be made aware of industry trends that are emerging, as well as any geographic demand hotspots that could detrimentally affect supplies of particular components.
Conversely, distributors need to be able to use their understanding of the market and key applications to identify where demands are likely to be at their most acute. By doing so, they can then ensure that they stock appropriate quantities of component parts for them to keep up with their customers’ requirements. Also, if a certain component is going to be difficult to source, they must use their expertise to advise what the potential alternatives might be.
The electronics industry has always been in a state of perpetual flux, with it never standing still but always progressing and adapting. Exciting new applications are continuously appearing on the horizon and component parts need to be selected that will support them.
Though much of the engineering focus is on the high-end active devices, it is often the commodity passive components where the procurement problems are at their greatest. The MLCC shortages that OEMs have been forced to deal with in recent times underline this point. They show the importance of establishing effective supply channels to combat the build-up of bottlenecks.