Active Components

Discrete semiconductors and integrated circuits with an active electrical function: power semiconductors (IGBTs, silicon and silicon-carbide MOSFETs), diodes, microcontrollers, gate drivers, and sense and protection ICs, classified principally under HTS 8541 (discretes) and 8542 (integrated circuits). They are purchased through franchise distributors, authorized independent distributors, or open-market brokers, and the channel choice is the largest controllable driver of price during an allocation cycle.

• Fixed price: common, 12-month tenor, annual reset with mid-year re-quote rights during shortages; standard for catalogue logic, MCU, analog and discrete part numbers
• Long-term supply or capacity reservation: common, rolling, with prepayment or take-or-pay volume commitments
• Cost-plus: occasional, 24-month tenor, quarterly cost review; used for custom silicon and consigned-wafer arrangements
• Spot: occasional, per order; broker buys during allocation, with premiums of multiples of book price
• Index-linked: rare; only as a PPI-based escalation cap in long-term EMS or defence agreements

• Typical savings potential: 4% to 14%
• Franchise channel share of category spend: Target 90%, minimum 75%
• Supplier, distributor and franchise margin share of unit cost: 10% to 25% (analyst estimate)
• Wafer and front-end fabrication share of unit cost: 30% to 55% (analyst estimate)
• Duty and tariff share of landed cost: 0% to 15%
• Typical pass-through lag from cost change to price: 90 to 270 days (analyst estimate)

• Migrate broker spend to franchise channel: "During non-allocation periods... premium that reflects intermediary margin stacking"
• Qualify pin-compatible second-source device: "allocation-driven price and lead-time shocks concentrated at one fab"
• Establish consignment or VMI with franchise distributor: "reduces reliance on broker fallback during short-notice demand spikes"
• Shift allocation-driven broker spend back to franchise (lever 16 of 20, not shown above): "once lead times normalize, a meaningful share of that spend typically remains on broker channel out of inertia"

• Track broker spend share monthly: set up a monthly report of broker and open-market spend as a percentage of category spend, as a leading indicator of allocation pressure (low effort, 3 weeks)
• Cross-reference the BOM against EOL notices: subscribe to EOL and PCN notification services and check the active BOM against published end-of-life notices (about 4%, low effort, 4 weeks)
• Benchmark against franchise published pricing: pull the current published sell price for the top 20 part numbers and compare against the invoiced price at the same quantity break (about 3%, low effort, 3 weeks)

• Power semiconductor allocation shock (supply). Impact: allocation-driven broker premiums and extended lead times can add double-digit percentage cost and multi-month schedule slip with little warning. Triggers: an unexplained monthly spend step-up above 15%; one part number above 50% of category spend; lead time on the primary device beyond 20 weeks. Mitigation: a qualified second source for the highest-value device, a rolling forecast with the franchise distributor, safety stock on the longest-lead device, and monthly review of manufacturer lead-time notices.
• Broker and gray-market counterfeit exposure (commercial). Impact: counterfeit or remarked components can cause field failures with liability, warranty and reputational consequences far beyond the price of the part. Triggers: broker transactions above 15% of category spend; no traceability requirement in purchasing policy. Mitigation: date and lot code traceability on all non-franchise purchases, migrate high-broker part numbers back to franchise, spot-check incoming lots, and report broker share monthly.
• Single-fab or single-country concentration (strategic). Impact: geopolitical or capacity disruption at a concentrated fab location can halt production of critical devices with no near-term alternative. Triggers: more than 50% of category spend traced to die fabrication in one country; no qualified second-source device for the highest-value part. Mitigation: qualify a second source fabricated elsewhere, track fab-location concentration as a standing metric, hold safety stock proportional to qualification lead time.

1. What percentage of category spend is currently sourced through open-market brokers rather than franchise distribution?
2. Is there a qualified second-source device for the highest-value power semiconductor part number?
3. Are any active BOM part numbers subject to a published or pending end-of-life notice?
4. Is date and lot code traceability documented for every non-franchise purchase in the last 12 months?
5. What is the current classification and Section 301 duty treatment for the top part numbers under HTS 8541 versus 8542?

• Full bill of materials with manufacturer part numbers and sourcing channel for the top 20 SKUs by spend
• Twelve-month purchase history by part number, quantity, price and channel (franchise versus broker)
• Current franchise distributor agreement terms including quantity breaks and stock-rotation rights
• Inventory aging report by part number
• EOL and PCN notice history for the active BOM
• Entry summary data (HTS code, duty paid, declared country of origin) for the last 12 months