This article is about why the only way forward for the electronics-driven and digital-based industry will be small-batch (even one-off) manufacturing of customized components like circuit boards, chips, and more. To date, these components have generally been manufactured in large quantities in the Southeast Asia region and China, and the supply and demand systems appeared to meet the needs of electronics companies around the world. However, problems related to the raw materials needed for production and an overall reduced availability of chips, semiconductors and circuit boards meant that many global companies had no choice but to put their business or production on hold.
What awaits you in this article:
The electronics industry is in a difficult situation
There is a persistent shortage of components used to make circuit boards, which are at the heart of most, if not all, electrical devices. This caused a large number of companies of all kinds to find themselves in a difficult position, unable to produce their electrical, automotive and even aerospace products, resulting in a decline in profits. The industry that suffered the most was the automotive sector. It was headline news for months; that waiting times for new vehicles had skyrocketed, that several major manufacturers had stopped working and laid off people, and yes, all because they didn’t have a tiny microchip. It is still a current problem in the world of automotive design and this shortage is expected to last until 2023 and perhaps even longer. Some of the major automakers such as Honda, Ford and Toyota have even reported that they plan to reduce supply to address the ongoing shortage of semiconductors and chips in the right quality and quantity.
Why was there a component shortage and what are the consequences?
There are a number of reasons for this deficiency, some of which are explained in more detail below.
Higher-than-expected demand for new hardware during the pandemic: More and more people and companies are looking for the same small components that make their electrical systems work. The same chips that both home workers and gamers needed meant that industrial applications had to be put on hold. Everyone bought PCs and laptops, digital cameras and smart home entertainment setups. It was an electronics producer’s dream situation. However, it could not and did not last, and throughout the home electronics manufacturing boom there were associated shortages and negative impacts on other sectors.
Lack of copper foil: When the production of electric scooters, bicycles and cars peaked, the need for copper foil increased tenfold or more. This led to a shortage of copper foil needed for circuit board production and a price increase of over $1,000 in just nine months. It was the latest in a series of material shortages that have disrupted the entire circuit board production process and highlighted how fragile the electronic components supply chain has been and continues to be. The 35% increase in copper foil costs led to an increase in the price of printed circuit boards, and these increases were passed on to the consumer in the form of increased prices for all forms and types of electrical and electrical appliances, vehicles and home entertainment products.
This results in poor quality of the resulting replacement parts and cowboy components. This was a direct result of increased demand for chips and PCB components as more and more small unknown companies sought to make quick profits by entering the PCB and chip sector. A black market for chips flourished, and as is often the case when there are shortages, more and more low-quality chips and circuit boards were designed, assembled, and flooded the market. Those who suffered most were smaller electronics manufacturers who did not have the strict quality control measures that all larger manufacturers and manufacturers can easily afford. Highlighting the need for constant testing and re-testing and why the sustainability, durability and quality of circuit boards are more important than just their availability.
Longer lead times resulted in lower profits: The fact that companies had to wait a long time to get the chips and semiconductors they needed to make their products led to financial losses. It was indeed ironic that the unavailability of the smallest basic component could hold up and even stop the production of some of the most complex and expensive electronic automotive and aerospace machines.
How the entrepreneurial sector can solve this problem
There is a lot of discussion on the Internet about a long-term and sustainable solution to the problems mentioned above. Small batch production of components and circuit boards is the prevailing idea and can actually solve the problem. The ability to make your own chips and design custom circuit boards is the opportunity that opens up in the current uncertainty. With available software, support resources, and training inspired by Altium, every small business, aspiring entrepreneur, and even the largest space tourism company can design and manufacture their own chips, PCB components, and more.
What is small series production all about?
With small-batch manufacturing, it is possible to obtain enough raw materials to produce exactly the number of customized chips and semiconductors in specific qualities and resulting circuit boards that the company needs. It is a new take on flexible specialization and has proven to be the best way for companies to meet their own semiconductor and PCB needs.
Closing remarks
Finally, the argument can be formulated as follows: In order for an electrical and digital production company to be successful, the entire supply chain and procurement processes must be reconsidered. Many would see the only solution as a return to a smaller production cycle, with smaller companies taking on the burden and the larger electronics and automakers producing their own circuit boards and chips in smaller batches. Software now in place allows for more precise testing of PCB components and parts, from power and usage to durability, while also ensuring that high quality components are used for their specific application potential. Small series production therefore offers a clear and recommended way out of the shortage of components and the resulting loss of quality of the available circuit boards.
