Issue link: https://iconnect007.uberflip.com/i/1069358
38 PCB007 MAGAZINE I JANUARY 2019 requirements, which certainly puts laminate suppliers in the hot seat to keep the supply flowing smoothly. Lee notes, "For most materials that we sell, the fabricator must have them to begin a job—they have to have a laminate, and that's where it starts. If we're not managing the supply chain, we can hold up a job or cost a customer because they're not able to do the job." As Martin and Doherty have pointed out, three very large markets right now seem to vacuum up the lion's share of the components in the supply chain: aerospace, electric automotive, and cellular t e l e c o m m u n i c a t i o n s. Lee says, "On that point, automotive is all we hear about. A lot of our suppliers are looking to develop new products. I know Isola has a new laminate product they're launching in Germany specifically for automotive." Lee does not leave out telecommunications, however, "Everybody's very curious about what 5G will bring and how that's going to disrupt the playing field." Lee continues, "Military and aerospace can be very demanding," and place even more constraints on the materials in the supply chain. "Another thing for us to manage is expiration dates" shares Lee. "We can't re- certify materials that are sold to military and aerospace even if the product is technically still good." How Long Will This Ripple? Dan Schoenfelder, VP of business development at Octopart, an online source for CAD tool parts definitions and parts availability information, notes, "From the data that we have available and the usage we have on our site, all indications are that the current trends are going to continue. It's hard for me to say from where I sit what's going to happen, even three, four, or five months out." Jamey Mann, director of global supply chain at Kimball Electronics, sums it up with statistics in his recent article for SMT007 Magazine "No Rest for the Weary: Supply Chain Pressures are Here to Stay!": "Due to underinvestment on the capacity, along with increased content requirements of today's electronics, the majority of manufacturers in the MLCC space are operating under allocation rules. Even as many of the major players in this market are currently adding capacity that equates to an approximate 15% increase in output, the market is projected to remain allocated through 2019 and into 2020. Book-to-bill ratios are still running in the range of 1.5:1." Watson provides the designer's perspective: "From the very first day of a new design, we are forced to question what components we use. The problem is that we don't know what the specific conditions will be from moment to moment. We have seen the problem from both sides in that components we originally thought would not be a problem have become a problem halfway through a design and vice versa. It has gotten so bad that on some occasions, once we located components, the parts would be already gone before we could fill out a purchase order." "I could validate that observation is accurate" adds Doherty. "And for a lot of these suppliers, it's coming down to economics. The most standard commodities have been heavily impacted. The prices have been driven down into the mud, and manufacturers are asked to produce more and more product each year at less and less total resale. The model isn't sustainable." Settling the Ripples When asked what it will take to fix this, Martin states, "The only thing I believe is going to fix the market is when we can get some increased capacity through new manufacturers coming in." To stay competitive and create long-lived products, design teams need to move their