Sunday, August 15, 2010

Parts Shortage, the dreaded "A" word: Allocation

There is an old story of when HP was little more than a garage, that Motorola bought one of their signal generators.  When the new generator arrived at Motorola, it did not work.  Being the best of geeks, the Motorola people took the unit apart, rather than getting on the phone as would happen most places today.  What the Motorola engineers found in some transistor sockets was a sheet of paper that read: "We shipped, you didn't".

DigiTimes is reporting that Passive component manufacturing equipment makers [are] extend[ing] delivery lead times, due to a shortage of parts.  One could presume the passive components the machines are indented to produce, are the parts that can not be gotten.  Que artist M. C. Escher classic Drawing Hands...

On the other hand we might also presume that the passive component manufactures can't get parts, because of the industry wide fab capacity shortage.  Not enough places in the world to build the ICs that we depend on for our products.

That some of the major fabricators set on large known earthquake faults doesn't give me the warm fuzzies either for a long term outlook.  Many of my designs are typically for industrial infrastructure, where life cycles are measured in decades, not the eighteen month cycle of Cell Phones.  I want parts that are going to around for a while, and a company that I can depend on them to deliver.

Some of the companies I work with are small, one, was until recently, only two people, others less than 50.  Many in heavily regulated industries.  To change anything in a product requires submitting paperwork to the Government, at costs into the thousands of dollars.  When a MegaCorp decides that your usage of only tens-of-thousands of their parts per year, is to little to be bothered with, is not something I can adequately put into words here on a family oriented blog.  How do I get MegaCorp to paying for these Paper Pusher type changes that part shortages bring about?

What brings my rant to light here today, is that on Friday a purchasing agent told me that the large component distributor Arrow Electronics Inc., reported that Atmel gave all of Arrow's allocation (Millions?) of DataFlash memories to a "special large customer".  Arrow's people are livid, and you probably are now too, if you were waiting for such parts.

I'll speculate that this has to do with Atmel Enters into Definitive Agreement with INSIDE Contactless for Sale of SMS Business and Atmel Completes Sale of Wafer Manufacturing Operation in Rousset, France to LFoundry GmbH.  'You buy our memory card business, and we'll see that you get the memories that you require'; at everyone else's expense.

Going forward before I design in a part I'm going to find out if the company has their own fabs.  Doesn't mean that some Bean Counter won't sell it in the future, but you can only do what you can do...

Have you been impacted by the current allocation crises, yet?