How do you find high-quantity prices for ICs? [closed]

Question

I know of findchips.com, oemstrade.com, octopart.com, and the like. But even the lowest prices on these sites are still higher than the prices on BOMs I get from China. How do you realistically estimate the cost of an IC purchased at high quantities for manufacturing purposes?

Answer 1

Generally be careful of just getting full BOM pricing from China.

I usually let them handle generic parts, resistors, capacitors, generic diodes, generic transistors. That type of thing. Production houses usually buy such parts in the 100k + lot size making them hard to beat. When your prototypes come back for checking i strongly urge you to test the parts they used. Its not uncommon for them to slip in 5% parts in place of 1% parts.

If there are parts where the exact tolerance or dielectric is critical i would supply these yourself.

If you have a good relationship with the production house, you can let them source some of the IC's as well, common parts like op amps they can usually handle but again, test, test, test to make sure its not some relabeled piece of crap.

For the rest of the parts, i usually go with a major part supplier. Arrow is my favorite so far. They have a wide array of parts they stock, maintain warehouses and contacts in China to work directly with manufacturing and my local contact is very responsive and happy to dice up the order however I want.

What i normally do is get a full BOM price from both arrow and the manufacturer. Then i sit down and cut up the BOMs based on who is giving the best prices. Then i move anything that is on the China order that i'm concerned about the quality of over to arrow if the prices are reasonably close.

You may find that after a few runs you feel more confident and have a better relationship with your China manufacturer, at this point you may want to move more part sourcing to their end. There absolutely are some trustworthy and capable production houses over there, there are also some very shady operations.

Another recommendation for dealing with Chinese manufacturing: Be very, very methodical with your test procedures. Use simple, direct language and lots of photos and diagrams. Remember that the average test technician probably doesn't speak much English.

Don't expect that they understand what the circuit does or be able to provide much debugging value. They are very efficient at testing given a solid procedure but generally don't have the time to understand your circuit or put much thought into attempting debug solutions.

Answer 2

For large quantities you work with distributors. Distributors are important, not just for ordering parts, but also for support. When I have to select parts the fact that there's a distributor with knowledgeable FAEs plays an important role.

Prices are the result of negotiations. It helps if you and the distri know each other, a purchase history will probably get you a more interesting price. Loyalty pays off. My experience with Belgian distris is that it's a small world, sales engineers from one distri know colleagues from another one, and they often know more about your orders with other distris than you would appreciate.

Working with a few big distris who have a big portfolio can have the practical advantages of one-stop shopping, but you can also negotiate package deals.
On one occasion I negotiated a very good price, but that was for 100k controllers/year, which we didn't need. The deal was closed at this price however, because we also needed a few other microcontrollers, and taken those together we reached the 100k turnover.

Bottom line: every supplier-customer situation is different, that's why you won't get a firm quote for large quantities. It's all about negotiating.

edit
That was for ICs (that's what endolith asked). Common passives like 0603 10k\$\Omega\$ resistors we don't even take in stock, but we let the subcontractor that populates the PCBs use them from their own stock.

Answer 3

Starting to have that dilemma myself - trying to price out some kits. Pricing will depend on quantity - contact the manufacturer directly, e.g. Maxim will sell DS1307 real time clock ICs for US$1.36 each for 1000+; retail here is A$3.62 (ex) each for 50+. If China prices are cheaper than the manufacturer you could be getting some ... sub-prime quality components, or slugs. Would love to hear what anyone else has to say about this as well.

Answer 4

You need to talk (and I mean talk - some still don't answer emails!) to franchised distributors, and if necessary play them off against each other.

Answer 5

From franchised distributors:

• Arrow
• Avnet
• Digikey, pricier but quick to ship

You will need to get quotes; they don't put this stuff online for "real" (>1 k) quantities.

Answer 6

High-volume pricing is a negotiation, not a quote. The closer you are to an actual purchase the more accurate the pricing will be. Keep in mind that the sales rep's job is not just to close the sale but to get the highest price possible. Very high volume pricing is essentially a trade secret, because sellers don't want buyers to know how much profit margin is available to be negotiated away.

Nonetheless it's hard to keep such information completely secret. You can ask around to people who have access to actual pricing, such as the app engineer, your component engineer, purchasing department, engineers on other projects or in other jobs, teardown reports on competitors, etc. It helps to keep after the latest information because pricing can change a lot over time due to supply availability or industry trends.

Answer 7

A rule of thumb which we used to use for high-volume prices was to take the Farnell 100-off price (Farnell is a UK catalogue company) and halve it.

This doesn't really work for high value semiconductors, but it's ok for commodity stuff.