The Incredible Shrinking Component: What Do Smaller Components Mean for the Electronics Manufacturing Industry?

By Logan Wamsley

In 2020, tech company Murata is planning to begin production on the GRM011R60J104M, a ceramic capacitor with approximately the same dimensions as a single grain of sand. Murata claims the part is 80 percent smaller than any other component solution on the market with the same capacitance — and has 10 times more capacitance than any other part with the equivalent footprint. Once introduced to the mass market, the manufacturer says the innovative design can be immediately implemented in all major smartphone models including iPhones, Pixels, and Galaxies.

The introduction of such technology is just one example of how manufacturers are rapidly evolving to meet the demands of their buyers, who by extension are trying to design what market consumers expect of them. In the case of most electronic sectors, smaller, faster, more efficient devices that represent noticeable advancements from previous iterations are anticipated.

The challenge is that it is exceptionally difficult to fulfill these criteria without compromise. The average high-end smartphone has between 800 and 1,000 components within its casing, while a budget smartphone can have between 400 and 600. As casings continue to shrink, it becomes more and more difficult to fit each component without accommodation from the chip manufacturers insofar as new designs.

This state of the market has had a variety of consequences, the most notable being an overall unstable electronic component market. While 2018 became defined by supply shortages that led to significant allocation issues, extended lead times, and an uptick of obsolescence designations, 2019 has seen a market overreaction with supply outpacing market demand. Although this means OEMs are experiencing a golden buying opportunity in the short term, this is not an ideal situation.

Instead of achieving proper balance, the expectations from many elements are that the new “normal” in the electronics manufacturing market will be one of instability and uncertainty. As far as the pendulum swings one way, it seems reasonable to expect that momentum will carry it equally far in the other direction.

And somehow as the market rapidly swings quarter to quarter and even month to month, OEMs must find a way to remain competitive in their sector. To do so, they will require the use of Big Data-based analytics that can accurately predict the market, thus allowing them to stay ahead of sudden market shifts and avoid potential allocation or obsolescence-based disruptions.

This goes beyond simple high-level views. Each and every individual component has its own distinct market that may not run parallel to the overarching narrative. For example, even as supply has increased for many component sectors in 2019, MLCCs are still struggling — in part due to manufacturers such as Murata taking the opportunity to transition the market toward more cutting-edge technologies. This means that manufacturers who are not in a position to make the leap will be caught in a transitional period until at least 2020.

To get a view of the market in minute, part by part detail, manufacturers will need to rely on partners such as Partstat who are capable of providing the necessary Big Data pool through BOM Monitoring. As Electronic Manufacturing’s only Electronic Component Lifecycle Platform, Partstat’s backbone consists of over 50 billion data points from over 5,000 manufacturers and authorized channel partners that allow us to be the only platform on the market able to predict and monitor both obsolescence and allocation.

Innovation may be exciting, but it’s also driving inherent market instability that is not expected to subside. This will mandate that third-party service providers step up and offer manufacturers solutions they will require to not only survive, but thrive.