Component miniaturization has a physical limit. With “more Moore” becoming a distinct challenge for component OEMs to live up to, the most innovative R&D and Industrial Engineering corporate backrooms look to take on new approaches.
With a current global shortage in MLCCs, due to a confluence of high demand, changing technologies, and manufacturer retoolings, the status quo leaves the industry with a new norm of monthslong component backlogs.
According to industry experts, a new, modular-focused shift is set to occur in the industry, starting as early as late 2019.
The Passive Integration Trend
“Modularization is more a philosophy, and this philosophy has not been embraced by everyone yet.”
Lambert Hilkes, a consultant with more than 40 years of experience in the electronic components industry, thinks this new trend is just over the horizon.
Passive integration, he explains, is a modularization of integrated circuits. He calls it “hybrid IC.”
“Instead of having thousands of tiny components left to manage, with modularization you might have three or four or five items instead. …0201s, 01005s and smaller are the new generation.” (“0201” and “01005” connote small resistor and capacitor sizes.)
Integrating passive components directly into the PCB or opting for the integrated IC module design can help offset the need for ever-smaller components. These advanced manufacturing techniques necessarily increase the price of new technologies, in what amounts to a guessing game for manufacturers between cost and performance.
It looms large for OEMs that a fundamental limit exists as to the amount of miniaturization possible for components. In an interview with ABC News, Gordan Moore said new methods aside from miniaturization would be needed beyond 2020 to continue the progress of computational power at such high rates.
Hilkes agrees that miniaturization can only go so far. “There is a limit to getting smaller. Nobody is able to handle at the moment smaller components than currently exist. There can only be so much miniaturization, so the next phase will happen for integration.”
What we Expect to See
Hilkes says the passive integration trend may begin in earnest as soon as late 2019. Once it takes root, he foresees a change in focus from miniaturization to modularization among industry players.
“The passive integration trend will not influence the industry immediately. Optimistically, this will occur in the next two years. Nobody is immediately ready to promote it on chip, for example. In the past, integration meant miniaturization. Manufacturers did not think of being the most modular.”
When asked about larger form factor MLCCs, such as those used in the automobile industry, Hilkes explained that this could represent unmet needs, and those needs might be met as part of the modularization trend.
“Newcomers may take this on. It could be an opportunity for good profit. However, at the moment, no one is currently offering.”
The passive integration trend could challenge the industry movement toward CEMs (contract electronics manufacturers) over more general-type OEMs.
Japan-based Murata, who deal with Tesla, manufactures on a customized basis for the company. Aside from custom deals of this type, “there is no standard, mass-produced MLCC of the type required for an automobile.”
Of the three aspects of passive function integration, Hilkes speculates that capacitance will be the most challenging, due to its critical role in an IC.
MLCC Shortage Guidance
Asked about the interim, where the current shortage of MLCCs has driven OEMs into monthslong backlogs, Hilkes explains that there may be some relief for small-form-factor MLCC buyers.
“Chinese suppliers are sitting on 3-6 months worth of small-form MLCCs for smartphones. They bet on this short supply happening. Chinese manufacturers only have so much demand, and it has dwindled too recently. So that will help against the shortage we see for a short period in the future.”
Earlier this month, Apple’s iPhone sales indicated weaker-than-expected consumer turnout. This, too, could decompress the shortage on small-form supply in the foreseeable future.
The next big industry player, poised to seize this integration trend, is clear to Hilkes. “Murata, of course, is the only big player I see right now. On the passive side, they have invested heavily.” Murata’s retooling of their production line to fit new needs for IoT and AI devices has exacerbated the industry-wide shortage, but serves to poise the company for future success.
When it comes to addressing the current shortage, Hilkes says there is no one-size-fits-all solution.
“My advice for those looking for a single idea to the MLCC shortage is that there is no single idea. I see some people like to work with distributors, others work on supply chains. I met some opinion makers just recently in China, and they all have their own ideas about what is right for them. There is not a single solution for everyone.”