Second sources mitigate supply issues

Samtec now second-sources its Si-Fly HD co-packaged and near-chip systems through a licensing agreement with Molex. It’s not the first time the two companies have been second sources.

Having a second source for critical components can save the day. That’s even more important today given supply-chain disruptions of raw materials. For basic devices such as transistors and op-amps, you may find several companies making nearly identical parts. In the case of high-speed interconnects where slight differences can make or break a design or production run, a second source can keep things running. That second-source supplier must, however, produce a product that’s completely interchangeable with the original.

Today’s high-speed copper interconnects can carry digital signals operating at 224 Gb/sec. Second source products must be interchangeable with the original, from the materials to the mechanical tolerances to the electrical performance. That’s why Samtec and Molex have entered into an agreement where Molex licenses the specifications and test processes for Samtec’s Si-Fly HD family of co-packaged and near-chip systems.

The Si-Fly HD is a set of connectors and cable assemblies that bypass PCB traces, improving signal integrity of high-speed digital data streams. Cables connect directly to on-board ASICs, right at the package (Figure 1). They carry signals to electrical-optical interfaces, called pluggable modules, that send and receive optical signals. Given the large scales of datacenters, these cables are in high demand, especially with the advent of AI.

Molex and other companies offer products similar to Samtec’s Si-Fly HD family, so why would the company sign a licensing agreement to manufacture a competitor’s product? To find out, EE World spoke with Keith Guetig, Director of Product Management at Samtec, and Bill Wilson, Group Manager, New Product Development at Molex.

The need for a second source

Purchasing managers for datacenters buy servers, switches, and their interconnects in high volume. Thus, they insist on second sources. “Customers demand more than assurances of reliable, cost-effective supply; they require demonstrated resilience and continuity across the supply chain,” said Guetig. “A reputable second source is today’s market expectation. Molex was the strategic choice. It’s an established partner with a proven track record of mutually second-sourcing products and reinforcing supply-chain assurance.”

“Molex and Samtec have had a history of second sourcing each other’s products for a few decades now,” added Wilson. “Although competitors, we’ve been able to collaborate on various product portfolios to satisfy the needs of the customer. Our product and market/industry perspectives are complimentary.”

The licensing agreement

Customers expect second-source products to perform on par with the original. To accomplish that, Samtec shares its technical specifications and test plans with Molex. While Molex may buy materials such as resins and stampings from sources different from those Samtec uses — in some case, they may be the same — it’s the fitting and performance that counts. For example, a Samtec plug must plug perfectly into a Molex socket.

Indeed, there’s an advantage in the two companies not buying materials or components from the same sources. If one company’s supplier has production issues, they likely won’t affect the other company’s ability to manufacture. “We want that diversity of supply to make sure that we minimize risk,” said Wilson.

Because of the licensing agreement, purchasing managers can get the equivalent company part numbers when ordering from distributors. In many cases, Samtec and Molex use the same distributors, who can stock and cross reference both the Samtec and Molex part numbers. If a Samtec or Molex part is out of stock, parts from the other company might be available. That’s the beauty of drop-in replacements. “It’s the continuity of supply, which sends a stronger message given the alignment between these two major suppliers,” said Guetig.