Rom report july 2024 2 - Flipbook - Page 2
What is Obsolescence?
Obsolescence in the semiconductor industry refers to the phase-out of components that
are no longer manufactured or supported by their original producers. This often results from
technological advancements, market demand shifts, and strategic business decisions by
manufacturers.
Causes of Obsolescence
Technological Advancements
Rapid innovation in semiconductor technology leads to the development of new
components that render older versions obsolete.
Market Demand Shifts
Consumer preferences and industry trends can shift, reducing demand for certain types of
components.
Strategic Product Line Updates
Companies periodically update their product lines, discontinuing older models in favor of
newer, more ef昀椀cient versions.
Regulatory Changes
New regulations can make it impractical or impossible to continue producing certain
components.
Supply Chain Issues
Changes in the availability of raw materials or production facilities can also lead to
obsolescence.
Impact on the Industry
Supply Chain Disruptions
The discontinuation of key components can disrupt manufacturing processes and delay
product releases.
Increased Costs
Companies may face increased costs due to last-time buys, redesigns, or sourcing
alternative components.
Maintenance Challenges
Long-lifecycle products, such as those in aerospace and defense, face challenges in
maintaining and repairing older systems.
Loss of Competitive Edge
Failure to manage obsolescence effectively can lead to a loss of competitive advantage
as newer, more ef昀椀cient components become standard.
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