Product discontinuation (PDN) means: the permanent discontinuation of a GigOptix's product or end part, part package or part packing type (ie. tape and reel). Customer Product Process Change Notices (PCN) means: a notification of a change in the form, fit, function or manufacturing process of an existing GigOptix's product that will continue to be manufactured.
In keeping with accepted industry practices, GigOptix periodically may elect to discontinue semiconductor product families, specific base products (die), end products, product packages, or product packing types. Reasons to discontinuing product manufacturing vary for such reasons as:
- The product is obsoleted at the end of its natural life cycle.
- The product no longer meets GigOptix sales, marketing or revenue requirements.
- The product transfer to a different process or manufacturing plant will require re-engineering of the product in such a way that the original product in its form, specification or application will be different than the part being discontinued.
- GigOptix cannot commercially manufacture the product to meet its quality or manufacturing requirements.
- The end product packaging, packing type will no longer be offered, or a third party subcontract manufacturer or licensor will no longer able to support GigOptix's requirements where an alternative product does not otherwise exist.
- GigOptix decides to only offer a selected version, or versions of the base die, or a commercial version of a customer selected product.
- GigOptix will continue to review and streamline our product offering to meet product line marketing and financial strategies, so as to focus on critical new or existing products that better support our customer base.
- GigOptix understands that changes in its worldwide product manufacturing plans and the discontinuation of its products may have a detrimental effect on our customers or distributors. Therefore, an orderly worldwide process must exist to give our customer and distributors routine product discontinuation notices under reasonable conditions to purchase their final life time requirements of manufacturable or available obsoleted products. Keeping in mind the above stated customer and distributor needs, GigOptix's goal is to also complete last time manufacturing and support of discontinued products within a realistic time cycle so that these products: may removed from the product lines; and their associated manufacturing, logistics and financial costs eliminated as soon as possible.
C. Product Discontinuation Policy:
GigOptix has a single public product discontinuation process, policy and customer notification system as follows:
- GigOptix product discontinuation policy sets forth the requirements for the worldwide sales regions to give product discontinuation notice and last time buy offers to customers and distributors.
- This policy establishes two (2) separate annual product discontinuation cycles year resulting in final customer or distributor PDN notices on June 30th and on December 31st each year.
- During each of these discontinuation cycles each year:
- We review our product portfolios during the initial 4 months of each PDN cycle and determine which, if any, products we may elect to discontinue.
- During the first 4 month time period of each PDN cycle, Product Marketing Managers may solicit sales or customer feedback, early alerts, as to whether certain products targeted for discontinuation should still be retained in our product offering. However, these early alerts are not the final decision to discontinue the products and are not to be considered a firm discontinuation notice to the customers. Rather, they are merely information gathering tools. All GigOptix official customer product discontinuation notices (PDN) originate from the Product Discontinuation Notice Management (PDNM).
- By May 1st and November 1st of each year, each of the Product Marketing Managers submits his final discontinued product listings to the PDNM for official customer discontinuation last time buy notice.
- During the 8 weeks from the receipt of all product group notices, the PDNM aggregates all discontinued products into a single PDN notice database. A number of verification steps also occur to check for proper codes, part number references and other quality assurance criteria to insure that customers and distributors receive accurate last time buy notices.
- On June 30th and December 31st each year, the PDNM issues the official GigOptix product discontinuation notices (PDN) to all customers and distributors of record in their respective sales regions.
- The customer product discontinuation notices include:
- PDN control number
- The official notice letter which includes last time buy conditions for the discontinued products, and the listing of the discontinued parts list with applicable coding and other specific ordering information.
- Some notices also include a special exhibit that clarifies or corrects information on certain previously discontinued products.
D. Last time buy ordering period:
GigOptix standard last time discontinued product ordering and purchase conditions:
- Multi-source products = 6 months notice is given from the official PDN date for products that are manufacturable or otherwise available. (*)
- Sole-source products = 9 months notice is given from the official PDN date for products that are manufacturable or otherwise available. (*)
(*) a longer last time ordering period may apply based upon specific approval of product marketing in each instance. Non-manufacturable or limited availability products are subject to the remaining product inventory, or limited manufacturing conditions set forth in the PDN. Ordering shall be limited on a first-come/first serve condition until the remaining product capacity or inventory has been sold. Last time delivery period: 12 months time period is given from official PDN date, unless: another time period is indicated in the PDN; or the product is limited in availability or is non-manufacturable.
E. Limited Discontinued Product Pricing:
The pricing for discontinued products shall be:
- The contract price for unordered quantities of discontinued products set forth in an official agreement between the customer and GigOptix. After the contracted quantity has been taken by the customer, the discontinued product unit price shall be subject to mutual agreement.
- The unit price in an existing standalone quote between GigOptix and the customer shall apply until the quoted product quantity has been ordered by the customer or GigOptix price quotation expires.
- The unit pricing for all new standalone quotes for the discontinued products shall be subject to market and customer conditions at the time of GigOptix quote and subject to the other terms and conditions of the PDN.
F. Limited Discontinued Product Delivery:
Discontinued product delivery dates are approximate, subject to the special last time manufacturing and total aggregation of all last time customer orders for the PDN part type(s). As such, GigOptix delivery of a last time buy order is not subject to a firm delivery date. PDN orders for discontinued products may not be rescheduled, terminated or rescheduled by the customer for any reason without GigOptix prior agreement, written consent and payment of full termination charges.
G. Limited Discontinued Product Availability:
If a discontinued product is limited in availability, GigOptix shall then allocate remaining capacity in the following priority on a first come-first serve basis:
- Product quantities on existing unfilled orders, or on contracts acknowledged by GigOptix, are tiered with strategic and sole source customers receiving first call on available product capacity or inventories. Distributors shall receive product support for limited products based upon the term and conditions of their distribution agreements and applicable distribution product policies then in effect.
- Unordered remaining discontinued product quantities on official volume agreements with customers, or unordered quantities in existing valid quotations to the customer or distributor get next available capacity.
- Any remaining inventory or capacity of the limited availability products shall offered on a first-come/first serve basis until the last products are sold.
H. Limited Discontinued Product Warranty:
GigOptix's standard limited product warranty returned material authorization (RMA) conditions apply to discontinued products: except that:
- The warranty period is limited to a maximum of 90 days from the date of delivery of discontinued products, and
- GigOptix offers a credit only warranty adjustment to the customer or distributor, unless sufficient Inventory or capacity remains to replace all or a portion of the returned discontinued products Within the PDN delivery term and applicable last time buy conditions.
- GigOptix offers no restocking rights customers for discontinued products once they have been delivered.
I. Disclaimer of Damages:
GigOptix accepts "NO" special, incidental or consequential damages whatsoever associated to the discontinued product, the use of discontinued products, or any claimed excess re-procurement or late delivery damage claims associated to customer or distributor discontinued product orders.
J. Additional Product Discontinuation Information:
Additional information concerning GigOptix PDN process, our terms and conditions of sale, and special distributor or customer notice practices is available from
GigOptix Sales Phone: +1-408-522-3100
This Product Discontinuation Process Document is not a controlled document and is subject to change.