Author: Marco Mezger, President of MEMPHIS Electronic
Recent reports indicate that the global supply chains have hit their ‘Goldilocks zone’, meaning perfect, stable market conditions. This is the first time in over four years during which we have seen wild swings between shortage and oversupply.
Purchasers might be enticed to lean back and relax. And while it is true that both prices and supply of semiconductors and memory components have been stable, there’s a shift in the market that is worth taking note of.
The big memory manufacturers have announced that they will discontinue DDR3 components in the course of this year. While this is not true for all densities and varieties, this technology is still widely used in set-top boxes, Wi-Fi routers, switches, displays, and industrial applications. The discontinuation of this technology from all the large players will have a significant impact on manufacturers of these types of applications.
There are two common paths to react to such an announcement: secure supply from smaller, specialised memory manufacturers that focus on longevity or move to a newer memory generation or technology.
With regards to the second option, it’s worth noting that the first manufacturers have announced plans to discontinue DDR4 components in the near future. This – combined with the fact that the major memory manufacturers have converted more than 20% of their DRAM production lines into lines for HBM – indicates that the output of traditional DRAMs will decline. So, the move to DDR4s, the next DRAM generation, and the most likely go-to option to move on from DDR3 has to be planned carefully.
High time to take a look at the available options:
1) What are your alternatives?
The past years have proven that the unexpected can happen. Being dependent on only one supplier for your memory component or module is extremely risky. Especially for critical applications in medical technology or in automotive environments, qualification is very complex and expensive. As a memory competence centre with over 30 years of experience in the memory market, MEMPHIS Electronic recommends qualifying two to three different memory alternatives so you can switch to an alternate product if delivery times are constantly poor or discontinuation looms. Of course, this is best done at the time when a new product is designed, but qualifying new options at a later stage is also very common.
2) Seen one, seen them all?
Memory components are standardised products, so the datasheets of the various manufacturers mostly look the same and differ only in nuances. Nonetheless, every memory has its own set of strengths and weaknesses and if you make a wrong selection, it can have a massive impact on the quality of your end-products.
MEMPHIS Electronic see beyond the mere part numbers when it comes to memory products. The team knows the strengths, timing values, and pinouts, and is able to provide genuine technical support and make objective recommendations on the products that best meet the needs of the design at hand.
3) Does a well-known brand equal reliable delivery?
When choosing memory, hardware designers often follow the recommendations of processor manufacturers. However, these recommendations generally apply to standard consumer applications and usually only include products from major memory manufacturers. As industrial customers generally only buy relatively small quantities compared to the high volumes of consumer products, they are in a weak position in times of allocation when large orders are prioritised. Particularly for long-tail products, it is worth considering a supplier from whom an industrial order is not just ‘peanuts’. This brings us to the next point…
4) How long will the components be needed?
With each new product generation, uneconomical, older technologies are being phased out to free up capacity for new developments. The discontinuation of DDR3 and DDR4 to free capacities for higher margin products that we see now is the best example. This information is not found in any datasheet. Specialty distributors gain insight into the manufacturer’s roadmaps and, based on this information and many years of experience in working with these manufacturers, can make more accurate assessments as to whether a component will also be available beyond the lifetime of your design. But even if they commit to long-term availability, our guidance is as follows: trust is good, but a Plan B is better.
5) Can you trust ‘just in time’?
Most manufacturing companies have given up their own parts’ warehouses because they tie up too many resources. However, natural disasters and geopolitical tensions have shown to have an impact on delivery routes and supply chains. Distributors with warehouses of their own are a good alternative. As part of long-term framework agreements, critical components can be stocked for a whole year or more. For less critical products, shorter stock periods give you enough time to find and qualify a suitable alternative.
Whether transitioning to a new memory generation or proactively managing discontinuations, these questions help mitigate the associated challenges.
In the volatile semiconductor memory market, maintaining vigilance is essential, even in seemingly calm conditions. Memory experts like MEMPHIS Electronic help prepare for future market swings, which are as inevitable as death and taxes.
