Have you heard the riddle about today's analog component marketplace? Here it is:

Question: When are two comparable analog devices not second sources for each other?

Answer: When the two devices are pin-for-pin compatible.

The riddle may sound crazy, but you must realize that as analog technology becomes increasingly more complex, and increasingly more critical, to today's digital systems, the day of the drop-in substitution is quickly vanishing. Voltage regulators are no longer pin-for-pin compatible. Operational amplifiers are the only exception. They are the last type of analog device that still has a high degree of pin-out conformity, but even pin-for-pin compatibility does not mean that two op amps from different suppliers will be functionally equivalent. Over the years semiconductor vendors have improved their processes to varying degrees and in different ways. Now, chances are good that even op amps which are pin-for-pin compatible will not provide the same bandwidth, slew rates or other performance parameters.

Even though second-sourcing is becoming more difficult in the analog world, it's not time to panic. In fact, not having second sources is not as perilous as it might seem. Indeed, a diminishing number of second-source devices is simply a sign of the freedom component vendors have had to innovate new, more powerful solutions and provide precisely what the market really needs -- highly capable analog solutions that are finely tuned to the applications they are intended for.

Different Agendas

Where you sit in an organization will have a bearing on whether you perceive quickly-vanishing second sources as a bane or a boon. Not surprisingly, design teams and purchasing departments have different agendas.

On the one hand, designers are concerned about performance and functionality. They want to know that the analog technology used in their designs will first provide the functionality needed. Secondly, they want to know that it will be consistently available. At least with older devices that provide commodity capabilities, like certain op amps, designers can still readily find devices from several vendors with pin-for-pin compatibility. Unfortunately, op amps that are pin-for-pin compatible usually don't provide functional equivalence. And if a designer was looking for a line driver, for example, for one of the emerging, high-performance markets like xDSL communications, the chance of finding functionally-equivalent line drivers that are also pin-for-pin compatible would be extremely remote if not impossible.

On the other hand, as a new system moves out of design and into high-volume production the purchasing department becomes involved. Purchasing is more concerned about second sources because it wants substitute devices that provide drop-and-go solutions with pin-for-pin compatibility. This maintains the OEM's leverage and minimizes supply risks. Unfortunately, the few remaining analog devices that are pin-for-pin compatible are not functionally-equivalent because each vendor has developed its processes differently over the last 10-15 years.

The Real World is One of a Kind

Dealing with and handling real-world analog signals has always been a complicated proposition. Today, many of the new and rapidly emerging markets involve both the analog and digital domains. When this happens, analog technology is usually the factor that determines the system's overall capabilities and this adds to the complexity of the analog technology because it must not only handle real-world signals efficiently, but it must also interface effectively to the digital world of computers.

Because emerging markets like xDSL communications hold so much economic promise many component vendors are simultaneously developing analog technology to meet the needs of these industry segments. This may be advantageous for design teams because competition among several vendors will motivate suppliers to innovate and develop advanced technology sooner. From the standpoint of the purchasing department, though, parallel development by multiple vendors will, in all likelihood, not lead to drop-in replacement parts. Each vendor will strive to provide the differentiated device that it believes offers more advantages than other devices currently available. The chances of these devices conforming to each other are slim indeed.

Value Propositions

Let's not forget that factors such as technical innovation and second-sourcing carry different values depending on the characteristics of the market segment, its maturity and where the market is on its growth curve. In certain consumer markets, for example, having a second source for analog components sometimes carries a high value, but these analog devices do not involve leading-edge or emerging technologies, and usually only offer commodity capabilities. Consumer markets sometimes place a greater emphasis on cost-reduction at the expense of innovation and leading-edge technology.

In other segments, like the newly emerging high-performance communications markets, there is no substitute for the value provided by advanced analog technology. Enlightened OEMs in these areas realize that the value derived from advanced analog components will be passed on to their users. In the end, these OEMs place a high value on happy and satisfied customers because they know that this is what will assure their success in a highly-competitive marketplace.

Defying Economic Laws of Nature

When you come right down to it, obstinate emphasis on second sources flies in the face of certain basic tenets of free market economics. If analog component suppliers followed the concept of second-sourcing to its logical conclusion, we would all provide the same capabilities in the same packages. The only differentiator would be cost. The purchasing departments at OEM suppliers might be happy with this type of situation, but the designers and the eventual buyers of OEM products would not. If such a situation existed, component suppliers would, over time, cease to innovate and eventually put their efforts into other markets.

Free market economies require diversity. Dynamic markets don't act in concert. Buyers have different objectives, motivations and response mechanisms. They look for products that are different, that have greater value, and that provide them with an advantage. With the possible exception of teenagers shopping for blue jeans, most buyers, and especially those in technical markets, are looking for products that are not just like every other product in the market. No one wants a me-too system.

Solving the Riddle