That depends on whether it is a fixed or mobile application.
If mobile, it is still OK if the item gets encapsulated or
conformally coated as well.
They actually dissipate their heat better as well.
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I don't think so. Horizontally mounted, the leads are short and
sunk to a pad/trace which helps with conducting the heat out of the
center of the resitor. Also, the entire horizontal surface is
radiating and convecting heat away from the resistor body.
Mounted vertically, only one lead is mounted close to a pad. The
other one and the body of the resistor catch the heat that's being
convected upward with the result that there's a temperature gradient
generated which will make the resistor progressively hotter as its
apex is approached. As a result, part of the resistor will be
hotter than if it were horizontally mounted.
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The ONLY problem I can think of that vertical axial leaded resistor
mounting has is in automated production cycles. It typically causes a
few insertion failures or solder cycle failures or a few sorts.
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See above.
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There is absolutely nothing wrong with the practice from an
electrical POV, however.
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If the dissipation is miniscule, I agree.
But, if the resistor is dissipating a sizable fraction of its rating
I'd be leery of mounting it vertically without getting some
temperature data.