8/18/2003 - Expanding its best-in-class customer service, Texas Instruments (TI) (NYSE: TXN) announced a new obsolescence policy for the company's logic and analog product lines. Effective immediately, TI will increase the notification time on discontinued logic and analog products to one full year, followed by a six month period when customers can take delivery. One of the most generous among semiconductor manufacturers worldwide, the new obsolescence policy gives customers an additional six months to manage their inventory and plan for replacement devices.
Because 80 percent of a customer's total development costs are determined at design time, failure to catch component-status changes by this stage could result in tremendous costs.
"At TI we understand the efforts our customers go through in planning their designs, therefore obsolescence is a last resort," said Gregg Lowe, senior vice president for TI's high performance analog division. "Our policy is simple: we won't obsolete products for 'convenience' purposes - in other words, if we can make the part, we will, even if the production volumes are low. Process technologies do change in our industry, and there will be times when TI can no longer reliably manufacture specific products; in that case we work closely with our customers, giving them this extended period of time to purchase parts, and showing them the right replacement part for their application."
With many other component manufacturers discontinuing devices for financial reasons rather than technological advancements, forecasting component obsolescence is virtually impossible in a difficult financial environment. Given the current trend for 2003, industry experts estimate over 200,000 components from over 100 manufacturers will be obsolete by the end of 2003.
"The current state of the market has caused many suppliers to issue end-of-life notices for a variety of components," stated Dan Pleshko, vice president of global commodity management, Flextronics International. "We are pleased to see that Texas Instruments is listening to customers and taking proactive steps to better the obsolescence process."
TI will not obsolete any standard linear or logic products in 2003. "If a customer wants to buy standard linear and logic semiconductor products, be that even one device, TI wants to deliver," said Steve Hanke, director of worldwide marketing for TI's standard linear and logic products. "We have worked hard to earn the reputation as a reliable supplier for standard semiconductor components and we are committed to continuing that tradition of service with this policy change."
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