High-reliability Components Market Shows Strength During Downturn and After

The market for high-reliability (hi-rel) components was one of the few growth sectors during the recent downturn. The concentration of military, medical, space, and aerospace - while not recession proof - mostly experienced moderate growth over the past two years. While much of this market involves serving legacy systems, new advances in satellite technology, medical systems, and downhole drilling is breathing new life and new components into the hi-rel market.

Hi-rel components gained traction about 50 years ago during the growth of the defense and aerospace markets. Much of the hi-rel market is still anchored in supporting the legacy systems that go back decades.

One major components distributor began life as a hi-rel distributor. "We started off as with a focus almost exclusively on the high-reliability market in 1971," said Michael Knight, VP of product and supplier marketing at TTI Inc in Fort Worth, Texas. "Now these components make up about 20 percent of our overall business."

Texas Instruments Inc. (TI) of Dallas started producing high reliability components 30 years ago. "Most of our customers were in defense and aerospace," said Brad Little, product line manager for TI's High Reliability Team. "There are still important markets for us, but especially in the last few years, our customer base has become much broader."

As for newer hi-rel applications, Little points to oil exploration, downhole drilling, undersea cabling, and railway lighting where product longevity in a high-temp environment is required. "Also the medical market where high-reliability devices or enhanced products are increasingly sought after - for example in sterilization equipment or in imaging and radiation applications," said Little.

New markets for hi-rel
The satellite and medical markets have helped the hi-rel market move beyond simply providing legacy components to older systems because they require the development of new components. "The hi-rel market is economy-stable. There is on average 100 satellites launched each year, and these are long-term, two- to five-year projects," said Little. "All satellites need to be replaced over time, and today's world economy is strongly attached to satellite data capability."

One of the biggest challenges with the space environment is the bombardment of potentially damaging radiation. "We're introducing a lot of new radiation-hardened devices for space, medical, and harsh environments," said Little. "For example, eliminating excess hydrogen in the IC manufacturing process - a high cost method - can improve not only radiation tolerance but will also allow the device to operate over higher temperatures due to reduced leakage and it also improves reliability from a 10-year expected lifetime to a 20-year operational lifetime."

Hardening components for harsh radiation environments can drastically affect the price of components. "A lot of satellites go up every year, so a lot of radiation-hardened parts are coming online," said Bill Toumey, supplier and programs manager at the aerospace and defense group at Arrow Electronics Inc in Melville, NY. "These parts are $5 for commercial, $15 for hi-rel, and $500 for hard radiation. And that's with the same function."

The robust satellite market is keeping a number of component manufacturers interested in developing new hi-rel products. "The satellite business is going to grow significantly, so we're concentrating on building for hard environments, wide temperature ranges and radiation resistance," said Ron Demcko, applications engineering manager at AVX Corp, a component manufacturer ins Fountain Inn, SC. "This is an area we're concentrating on because we know its going to be steady. We're changing the configuration of parts. We're changing material systems to increase the performance of our components."

All in all, the space business is large. "The satellite business is $50 billion between NASA, the Department of Defense, and commercial folks - TV, radio, and telephone," said Arrow's Toumey.

Recession-proof components
One of the benefits of the hi-rel market is its general resistance to economic ups and downs, opposed to the very volatile computer and consumer electronics markets. Component pricing and production went through wild swings over the past three years. Not so with high reliability components. "Military semiconductors stayed robust and continued to grow even through the recession," said Bryan Brady, VP of defense and aerospace at Avnet Inc in Phoenix Ariz. "Much of that was driven by ongoing increases in funding for legacy programs still using mil spec [military specification], and we haven't seen any price declines in those parts. A lot of them are proprietary, sole-source, so the pricing is very stable."

Even if the military slows down in procuring arms, the programs coming into production require a larger portion of electronics than past systems. "The military was strong through the recession. It held up better than commercial," said TTI's Knight. "Even as we move away from armament, there have been delayed programs that are getting kicked back alive, like the Joint Strike Fighter. So even if the military is softening, the electronics content in their programs is going up."

The one soft area in hi-rel components during the recession was in aerospace, particularly in the small jet world. "Aerospace got extremely soft during the recession, but now it's showing life," said Knight. "The small jets went away for a while, but now they're coming back. The big commercial aerospace companies - Boeing and Airbus - are getting their next generation to market. There's also increased activity in advanced military drones."

Keep the lead in
Finding leaded components continues to be a challenge for those buying hi-rel parts. While many component manufacturers are supporting legacy parts in leaded versions, few have created leaded versions of their new components. "By definition, hi-rel parts are leaded," said Avnet's Brady. "Over the past 10 to 15 years, the commercial plastics and COTS [commercial off the shelf] has become the dominant product in the military." However, he noted that new designs are almost entirely commercial products and many of those new parts do not contain lead. "Sometimes the military is using mitigation strategies such as solder dipping and re-balling to guard the component against tin whiskers and other solder reliability concerns."

A number of component manufacturers that have made a commitment to the hi-rel market by creating leaded versions of their new components. "With all our new components, we're bringing out tin-lead options," said Chris Reynolds, technical marketing manager at AVX. "Any part we produce commercially will also be introduced with tin-lead alternatives. We even supply some parts with gold-content solder."