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Consolidating product ranges allows OCM's to focus on the production of fewer devices, this allows mass production of fewer parts which ultimately speeds up time to market for customers. The ability to speed up production in factories is one of OCM's top priorities when the market is in high demand like it is at the moment, the industry is working to tight deadlines but lead times are still at 34 weeks+ which is putting a strain on the component industry. The increased demand of semiconductors over the past two years has mainly been an impact of the amplified production of electric vehicles which as a result has pushed lead times out to as long as 52 weeks by some manufacturers.
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When demand for components is high and the OCM's are not producing components fast enough to service the demand, they will look to prioritise the production of their most popular devices and will decide whether or not to make underperforming devices obsolete in order to ease the production flow. While component obsolescence is not a new issue, it is becoming more acute within the industry. Recent consolidation in the supply base, coupled with mergers and acquisitions, transitions to new technologies and the changing demands of new systems has resulted in a higher rate of component obsolescence. When two companies merge it is quite common for the low-volume and redundant lines to be eliminated from the product portfolio.
When PCN's (product discontinuation notices) are announced and buyers are made aware of component obsolescence, they should determine their own demand for parts over the next five years and assess whether it's worth designing in a new part and phasing out the old device or just searching the market for existing stock. If the demand is relatively small and stock is likely to be on the market, then customers have two options; to purchase a lifetime buy or to source devices on the open market.
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