What 2017’s Potential Component Shortage Means for Design Engineers

March 09, 2017 by Robin Mitchell

Veteran engineers and market forecasters alike have fears of an impending component shortage this year. What evidence is there to suggest such a claim and if true, how will engineers be affected?

Veteran engineers and market forecasters alike forecast a possible impending component shortage this year. How can they tell and what should engineers know?

Predicting the electronics market requires more than simply anticipating demand on the consumer-end—it also includes watching supply lines and the actions of the manufacturers from which designers purchase products and parts. This is one of the reasons why part selection for electronics is so important. A unifying experience, it seems, is that all engineers at some point have had difficulty either finding a part or a viable replacement at a good price.

So it may cause some anxiety to hear that the component selection stage, according to some market experts and veteran engineers, is going to get more difficult in 2017 due to the possibility of component shortages. Why would there be a component shortage and what evidence suggests such a claim?

Changing Needs for Changing Tech

Predicting how the electronic components market will change requires observation of the entire supply chain, from the raw materials to the individual distributors. Distributors help to give an idea of current inventory stock levels while raw material availability and reserves help with understanding the long-term effect on the component market. So what does the supply chain tell us currently?

Inventory Stock: According to EPS News, current stock levels of electronics components is at a historic low. Despite the fact that distributors exist to distribute parts, holding inventory not only costs money in purchasing but also in storage. If, for example, only 10 parts of a specific component can be sold in one year, what would be the point in stocking 100 of those parts especially when precious storage space is used in the process?

So, in an attempt to keep inventories as low as possible, some semiconductor manufacturers have gone as far as to keep integrated circuits still in die form and only package what they can ship out.

Investment: Currently, semiconductor manufacturers are apparently no longer creating 10-year investment plans for new semiconductor plants. This has resulted in a limited high-tech manufacturing sector (for example, few fabrication houses can actually produce 14nm transistors and Intel has even canceled the creation of Fab 42 ion Arizona) which results in fewer high-tech parts being available.

Production Shift: With the ever-growing demand for mobile devices and cloud technology, there is pressure for manufacturers to shift production towards more mobile-orientated parts. The top three DRAM producers have responded to this shift and are now focusing more on mobile and server RAM as opposed to PC RAM. This shift will affect the PC market and potentially increase the price of PC RAM in favor of the mobile market, which needs prices to stay as low as possible so it can grow.

Technology Shift: As time has progressed, the storage requirements for mobile devices has drastically increased. Since transistors are beginning to reach their limits, NAND flash memory producers are making 3D NAND flash their top priority. However, until this technology is made viable for mass production, 2D devices will continue to be used by mobile companies.

If production of 2D flash isn't increased, there is a real chance that there will be a NAND flash shortage. This will increase the price of solid state memory and thus the cost of any final product in which they are used.


An example of a NAND flash board, the Samsung K9F1G08U0C. Image courtesy of AliExpress.

What Shortages Mean for Engineers

So, with all this information on how the supply chain is changing, what can engineers and designers expect? What precautions should engineers take when designing new products to mitigate against a potential component shortage?

Unfortunately, this issue has no one-size-fits-all silver bullet solution. The best most engineers can do is to stay informed and make sourcing decisions accordingly.

As discussed above, the mobile market is likely to keep growing and the PC market is likely to further decline. While PCs offer superior performance over mobile devices, the majority of customers do not require intensive tasks such as thermal simulations and 3D rendering. Since tasks such as using Facebook and YouTube are very easy for an ARM CPU to complete, most mobile devices are suitable for the vast majority of everyday use.

If semiconductor companies cannot crack the 3D memory problem by mid-2017, it follows that the cost of NAND flash will rise until manufacturers can step up production of such devices and meet the demand. However, this will also mean that the amount of data that can be stored using NAND flash will not increase as companies are presumably focusing on the 3D problem as opposed to making 2D planar transistors smaller.

It's probable that the result will be cheaper and more widely available mobile parts. But it's also possible that this could translate to more expensive PC and DRAM parts.


RAM for PCs could become more expensive. Image courtesy of Flickr


Due to the volatility of markets, it is difficult to create a fool-proof plan to protect against component shortages. However, we can see trends that may inform design plans. For example, considering how the mobile market is growing, the best course of action may be to take caution with designs that require NAND memories that are more than a few years old. This is because NAND flash manufacturers could drop an entire family of devices to meet demands on more recent NAND memories.

Common sense also suggests that it may be a good move to use more generic parts in products that are widely pin-compatible with other products. This ensures that, if your chosen IC becomes unavailable, it can be replaced with another part.


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Market prediction is difficult and making certain plans to mitigate against such uncertain events could almost be considered dramatic. However, engineers and designers alike must always consider market factors when designing and choosing parts for a circuit because those parts will not always be in production.

What are your experiences with component shortages? What does the component crystal ball tell you?

1 Comment
  • L
    Lopsd March 14, 2017

    I think the main subject is to reduce ignition risk and spread of flames inside the equipment to the exterior

    Like. Reply