Why Invest in Thermal Simulation?

This document presents the financial case for electronics companies to invest in thermal simulation software. Various questions are posed, and the answers are presented for a typical medium sized company with sales of $30M per year. Alongside these ’typical’ answers, you may wish to insert figures or estimates for your own company.
    Typical Company Your Company
a) Approximately how many new products, or reconfigurations of existing products, does your company design each year?
4
b) Approximately how many thermal tests are performed in your company each year?
6
c) What is the cost of a typical thermal test, including staff time, materials, use of laboratory, test & measurement equipment?
$10000
d) Estimated cost of thermal testing (per year) = (b) x (c)
$60000
e) If one or more components are found to be above their temperature limits, approximately how long does it take to carry out a ‘fix and test’ redesign cycle to solve the problem (eg. by adding a heat sink, re-sizing or repositioning fans and vents)?
3 weeks
f) What are the approximate direct (rework) costs to your company of such a ‘test & fix’ re-design?
$20000
g) What percentage of new products (or reconfigurations of existing products) fail thermal testing first time?

50%
h) Total direct costs of redesign associated with products which do not pass thermal tests first time (assumes 3 ‘test & fix’ cycles to correct each problem): (a) x (g) x (f) x 3
$120000
 
i) If the final product ship date is delayed by the time show at (e) above, what is the cost in terms of lost/delayed sales?
$100000
j) Total costs associated with products which do not pass thermal tests first time (including ‘lost/delayed sales’ element):
(h) + [(a) x (g) x (i)]
$320000
 
k) What are the total annual costs associated with ‘field failures’ (i.e. warranty liabilities, field engineer calls, etc.)
$500000
l) What percentage of field failures in (k) above are associated with thermal problems (industry reports suggest 55% is the average)
55%
m) Total cost of field failures associated with thermal problems: (k) x (l)
$275000

Summary

Using the above example figures, we can estimate the savings due to the correct and timely use of a thermal simulation tool in the design process (it is assumed that all new products and product reconfigurations on which the tool is used pass thermal verification testing first time).

n)

Direct savings (on rework and associated costs):
$120000
o)

Savings (including lost/delayed sales element):
$320000
p)

Savings (including 'field failures' element):

$595000

The above analysis puts the cost of thermal simulation in perspective, in terms of the overall cost savings and market advantages which can accrue. Based on the above analysis, it is clear that a properly-applied thermal simulation tool represents an excellent investment for small-, medium- and large-sized electronics companies. These testimonials from successful companies clearly illustrate the benefits of applying thermal simulation in the design process.

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