Best Practices for Managing Obsolescence: An Interview With Shawn Bloomer

Recent market trends have led to an increased rate of obsolescence in the semiconductor industry. Legacy components are being phased out and going end-of-life (EOL) sooner to allow for more capacity and ensure the most lucrative products can be produced. Navigating obsolescence can be challenging as the market is constantly transitioning between shortage and excess. Unexpected externalities always threaten this industry with disruptions that could prove costly. Therefore, understanding how to manage obsolescence properly is vital.

Converge’s Shawn Bloomer, Director of Global Programs – Americas, recently gave his thoughts on obsolescence in today’s market and what the best ways to handle it are:


Q: Why do you think obsolescence is accelerating now, more than ever?

A: There are several variables at play when considering driving forces of obsolescence. There are technological advancements, shorter product lifecycles, supply chain challenges, and resource limitations.

The pace of technological innovation is constantly accelerating, driving demand for more advanced and efficient semiconductors. Semiconductor manufacturers are continuously striving to create smaller, faster, and more powerful chips, resulting in the obsolescence of older models that can no longer meet the demands of modern applications.

Now we take those accelerated advancements and we overlay shorter product lifecycles. What I mean by that is consumer electronics, appliances, and other devices that rely on semiconductors are becoming increasingly commoditized, with shorter product life cycles. This trend puts pressure on manufacturers to reduce costs and differentiate their products, often at the expense of longevity. As a result, older semiconductors are often left behind as manufacturers focus on developing new and innovative products.

However, we have just experienced a market like none before with the exponential increase in global supply chain disruptions. Events such as the COVID-19 pandemic and geopolitical events have exacerbated the issue of semiconductor obsolescence. These disruptions have made it difficult for manufacturers to secure the materials and components needed to produce older semiconductors, further shortening their availability and driving up prices.

The last key variable driving obsolescence is around raw materials and the limited resources needed to produce today’s technology. The production of semiconductors relies on a limited supply of raw materials, such as silicon and rare earth elements. As we approach the physical limits of miniaturization, the manufacturing process becomes more complex and resource-intensive, driving up costs and potentially limiting the longevity of older semiconductors.

At the end of the day, semiconductor manufacturers consider these when thinking about their portfolio. They have finite capacity, and they decide what components to produce based on what is in demand and what will be most profitable. With the acceleration of technology and the growing demand in the market, we’re starting to see more end-of-life events happening on older or less profitable lines.


Q: How can organizations be more proactive in managing obsolescence?

A: One of the first ways organizations can be more proactive in managing obsolescence is by communicating sooner and more frequently with component manufacturers. By including manufacturers during the design stage, organizations receive the necessary information to plan for the longevity and availability of components long term.

However, even in the most ideal situations, there is always a need for additional information and to be alerted to issues arising with end-of-life events. That is why I also recommend that my customers use a component database, like SiliconExpert, to verify their BOMs throughout the lifecycle and be alerted of any unexpected issues.

Lastly, an important tool for your toolbox is to have a secondary strategy for when parts go EOL but you still need them for a period of time. This is where a connected distributor, like Converge, comes into the conversation.


Q: Once an organization receives an EOL (End-of-Life) notice from a manufacturer, what is their next step?

A: The first thing an organization needs to do is analyze the lifecycle and volume of their product to assure they can achieve the target life of the product. When it’s possible, the engineering team may be able to identify alternative parts to replace the obsolete component, however that comes with its own set of challenges and often requires recertification and timely delays. The other option is to elect to have the procurement team purchase the quantity required to achieve the remainder of the product lifecycle. This option can come with a variety of customized obsolescence programs to ensure enough stock is available and you achieve an optimized inventory management schedule to receive them.


Q: Why is it so important to have staff dedicated to managing an organization’s obsolescence strategy?

A: Obsolescence is constantly being affected by other variables making it incredibly complex. You need a person or team to constantly analyze product lifecycles to alleviate issues before they arise. A dedicated team or person can also liaise between procurement, engineering, and supply chain teams to increase communication and cohesion. This way, everyone is in the loop, and no one gets caught by surprise when an event happens. 


Q: What are the best practices for organizations to vet lifecycles of new products being implemented in contemporary designs?

A: It’s important that component manufacturers are sharing their “horizon” reports, or lifecycle reports, of products and that it aligns with the organization’s product life needs. Then, organizations must forecast usages accurately to the manufacturer so they may plan for the capacity demands accordingly. The more transparency and communication between manufacturers and their customers, the better.

While getting information directly from the manufacturer is the best source for understanding product lifecycles, there is also the opportunity to use a component database, such as SiliconExpert, which has algorithms to predict years-to-end-of-life that can be helpful in the design stage.


Q: Why is inventory management so important for managing obsolescence?

A: Assuring supply of components for the life of a product is paramount to successful lifecycles and sales. Understanding the process of pre-purchasing components during an announced LTB (last-time-buy) period is critical for organizations to maintain supply for, potentially, years to come. 


Q: How do you envision the future of obsolescence?

A: I anticipate obsolescence to continue accelerating in the semiconductor industry. Mergers and acquisitions (M&A) typically drive product line discontinuations. In the past, profitability expectations, combined with a finite capacity, required semiconductor manufacturers to continually analyze profits by part family or product. This was to ensure the most profitable products in their portfolio had the capacity needed. I predict this will happen again.


Q: How does Converge help organizations manage their obsolescence, bring them better Return on Investment (ROI)?

A: Through our supply chain solutions programs, we can help organizations purchase and hold obsolete inventory for future use during an LTB event. After an LTB event has ended, Converge has the global footprint and network to locate obsolete inventory, procure it on our customers’ behalf, and support their production needs. These help customers understand risk before it impacts their business.


Meet Shawn Bloomer

Best Practices Obsolescence Shawn Bloomer

Shawn Bloomer has over 27 years of experience competing and supporting semiconductor component products globally with astounding success. He has extensive experience managing global distribution channel relationships and building success in the Americas and globally.

Contact Converge to learn more about our unparalleled obsolescence management and supply chain services.

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