Component obsolescence: Trends to watch in 2026

AI has put hyperscalers and GPU innovators on everyone's radar this year; their CEOs are touting next-gen computing and all the opportunities that come with it.

The hype is well-founded, but it's obscuring the day-to-day needs of manufacturers seeking CPUs, ASICs, analog and memory chips, and other workhorse technologies needed to build and keep their equipment running.

The sophisticated, multi-million-dollar equipment manufactured for the military/aerospace, industrial, medical, and other sectors need reliable access to parts for production, as well as repairs and refurbishment. The semiconductors on board can number in the thousands, driving complex systems whose precision and functionality rest squarely on their performance.

The relatively short product lifecycle of these chips means that they may need to be replaced long before the equipment they are in is retired, making component obsolescence a hot-button topic for technicians and procurement teams tasked with keeping machines in the field for as long as possible.

Legacy equipment often relies on prior-generation components for essential functionality. Engineers staring down the possibility of a crucial component becoming unavailable gain a particularly acute appreciation for obsolescence and EOL management.

The rate at which chips do so keeps many of them up at night. With 470,000-plus parts put out to pasture every year, a trickle can become a deluge in a hurry. Chip manufacturers continually retool for next-gen products that drive relevance and profitability, often at the expense of the components powering their customers' equipment.

Where the semiconductor industry stands today?
Original equipment manufacturers (OEMs) took part in the buying frenzy that put huge stockpiles of critical buffer inventory on the shelves after the pandemic. We've been bumping along the bottom of the demand trough for several quarters as this inventory has worked its way out of distributor, manufacturer, and end customer warehouses.

But, the semiconductor industry is nothing, if not cyclical! Even though this cycle seems to have dragged on longer than most, we are beginning to see an uptick in inquiries from customers with EOL notices in their inboxes, needing to secure more components to support their legacy systems.

Keeping the focus on mature-node workhorses (feature sizes up to 28nm) that often fall victim to obsolescence, we're continuing to see signs of inventory normalization, though there are vestiges of all that pandemic-related double and triple ordering still to be found at EMS companies. Book-to-bill ratios are rising.

For those of us in the semiconductor industry, cautious optimism has returned. For those on the receiving end—the equipment manufacturers consuming the semiconductors—I would go with "caution," full stop. Inevitably, overabundance gives way to scarcity, and geopolitical headwinds can reach hurricane strength if fab capacity or global supply chains are compromised.

2026: What's on the horizon for mature-node chips?
Altogether, mature-node chips accounted for about 88% of semiconductor units sold globally in 2023, enabling $10.8 trillion in economic activity across a range of downstream industry verticals. The industrial and government sectors are particularly reliant on mature-node chips, with the automotive sector not far behind, according to Semiconductor Industry Association (SIA). 

Engineers and procurement teams in these sectors with legacy equipment that relies on prior-generation components are well advised to keep a close eye on availability. Similarly, the component manufacturers serving them should be diligent about providing ample notice of soon-to-be-obsolete product families as demand for critical parts accelerates.

Within Flip Electronics' area of expertise—obsolete and EOL components—we're seeing healthy demand in the mil/aero sector as NATO and other countries increase their military budgets. We're also noting steady demand in Asia as that market (again) leads the recovery. In contrast, a European market, more heavily dependent on the industrial and automotive sectors, is typically the last to recover, with the U.S. somewhere in the middle.

Preparing for obsolescence, before it happens
EOL notification horizons usually give OEMs adequate time to prepare for what's coming—but not always. According to one study, 30 percent of EOLs do not have a product change notification (PCN) issued beforehand, which means the best offense is a good defense.

OEMs and their end customers are loath to sunset production of a high-dollar piece of equipment prematurely just because a part runs out. They're equally wary of getting what they need on the grey market, where counterfeiters abound.

Engaging an authorized distributor that specializes in obsolescence strategies can help keep production lines and legacy systems operational. Industry experience, forecasting tools, and strong supplier relationships ensure that no one gets caught flat-footed, scrambling for suddenly hard-to-find components.

At Flip, regular communications with authorized partners keep us abreast of their product introduction roadmaps and obsolescence timelines, giving us an average of 12 to 18 months' notice of pending EOLs and allowing us to secure inventory for our customers accordingly.

In addition, Flip Electronics Manufacturing Services ensures uninterrupted production of critical components for our customers, after the last time buy, delivering genuine 1:1 drop-in replacements, authorized and licensed by the original manufacturer. It's the insurance policy OEMs and their customers need in a fast-evolving world.