31st May - Valencia.

Many believe the worldwide chip shortage issue will not ease until 2023, and it is set to get worse over the next 18 months as longer lead times and higher prices kick in.

In a recent report by U.S.-based electronics distributor Avnet based on over 500 engineers, they highlight that as a result of worsening times, engineers are building products based more on the availability of components rather than their preference, and are swapping them out with pin-to-pin replacements with different specs  or, if possible, drop-in replacements.

Car maker Stellantis, for example, have scrapped digital speedometers for their Peugeot range and instead replacing with analogue devices. And many makers are asking customers to return at a later date to be upgraded when supply of premium devices have been replenished. 

It seems now that many companies are turning to the expertise of the engineering team to gain a much more favourable position to ride through this turbulent period. However as countries try to adjust to semiconductor production other than the Far East, so the need for engineers becomes acute and these highly skilled resources are not easy to find.

HBR notes that leading companies are turning to their engineering team to adjust the way the company designs its products, in order to more rapidly and effectively mitigate supply chain shocks, with a focus on two key capabilities: designing for resilience and designing for availability.

Companies with more resilient product portfolios can minimize their exposure to the disruption and makes it easier to quickly respond and adjust their products, if needed.

There are specific strategies that leading companies have which can improve a resilience strategy’s odds of success:

1. Decouple software from hardware.

In a chip shortage, when it’s not possible to control the hardware, leading firms make the hardware less critical to the product and increase reliance on software by adding a flexible middleware layer on top of the firmware.

2. Design modularity.

Leading companies use standard approaches and flexible product architecture wherever possible, including building in additional time to test and qualify multiple acceptable parts.

Eg. Acer, said that it intends to design a “different kind of product” that will give it a wider selection of device component resources, as the company looks to counter the current chip shortage and rising semiconductor prices.

3. Insulate a product’s components.

With fewer interdependencies between teams and products, the work required to redesign a single part in the event of a shortage, becomes self-contained and less daunting.

4. Reduce number of product parts and incentivise the re-use of components

This can make the product less susceptible to supply chain hitches. By integrating standard, approved parts into product design and computer-aided design toolkits, strengthening collaboration between the engineering, sales, and procurement teams, and working directly with suppliers to design critical components ensures availability and reliability.

Design for Availability

The most successful companies in ‘designing for availability’ start by deploying an agile team, with the right skills to quickly and effectively achieve the redesign. The most effective agile engineering teams rapidly modify software to accommodate new parts, adjust the current product to free up resources for more important features, and use rapid prototyping and testing to validate the new designs.

Using a mix of design for availability and resilience, Tesla for instance,  when it faced a shortage of its typical microcontroller units (MCUs), the company’s agile software development capabilities and modular technology architecture helped it to rapidly develop and validate 19 new, alternative MCUs, while simultaneously developing firmware for new chips made by new suppliers.

As the Avnet report states, over 55% of engineers surveyed were redesigning boards and hardware due to the chip shortage and price hikes. Engineers also had to delay the development of boards, or incorporate a new design that used alternative components that were widely available.

Among those surveyed, 35 percent were considering parts with less functionality and lower specs.

"The use of substitute parts is also having an impact on the final product, with 81 percent of respondents reporting the need to modify the performance and functionality of the final product," the survey said.

The US and Europe have also sounded the alarm on counterfeit chips, mentioned as a concern in the Avnet report. About a third of respondents said counterfeit components would become a bigger problem, and 42 percent of respondents were testing and qualifying chips using X-ray detection or via third parties.

Labour shortages

The Wall Street Journal recently claimed that as world’s largest chip makers are trying to build ‘fab’ factories to address the chip shortage so they are dragged into a fight for workers to staff the billion-dollar-plus facilities.

Disruption caused by the semiconductor shortage has even propelled the crisis high up on the agenda of US President Joe Biden. As part of his $2.3tn infrastructure plan Biden has earmarked $50bn for semiconductor research and manufacturing in a bid to increase domestic supply.

However as the requirement to build many semiconductor plants grows to help domestic needs, so the need for highly qualified skills becomes apparent. 

Industry experts say that a shortage of qualified staff is a growing problem, especially the highly qualified engineers needed to design new chips and solve manufacturing problems for ever more complex ones 

Many industries are experiencing labour shortages. While chip makers have an advantage because their processes are among the most-automated, the high-tech equipment used at their facilities still requires skilled staff to operate it. The scale of expansion taking place now is creating exceptional demand for personnel, often in niche fields.

Finding the right engineering expertise

The difficulties of finding the right skills becomes an arduous task particularly when working on a global scale. Many companies turn to experts such as CIS , who have built a strong background and reputation on providing specialist embedded engineering contractors whether it be remote, on-site or hybrid operations throughout the world. This is based on over 20 years’ experience in the sector, often finding the right match of highly skilled engineers among a dwindling and highly sought after group of available resource. Make sure chip shortages are not a problem for you by calling CIS on +34 963 943 500 to ensure your specialist designs can be delivered.