Driven by sustained high levels of demand from high-tech and component heavy sectors, the semiconductor industry continues to grow. Speaking recently, John Neuffer, the president and CEO of the Semiconductor Industry Association (SIA), stated that “the global market has now experienced year-to-year growth of greater than 20 per cent for 13 consecutive months.”
Yet underneath this positivity lies something of a darker reality; that of increasing lead times and diminishing availability for many key lines and product groups. Due to demand from major OEMs and automotive firms exceeding all predictions and forecasts, semiconductor manufacturers have been unable to meet market needs. As a result, we have reported that there are severe shortages.
However, our research does indicate that this round of shortages and elongated lead times are beginning to level out. Overall market availability has eased somewhat since our May update and many lead times are showing positive movement. We believe that the availability of NXP, ON Semiconductor and ST Micro lines have improved, with lead times decreasing to reflect this.
Of course, this should be taken in context. Many long-standing issues still remain. Lead times do remain high across the entire market and supply levels are still constrained, especially capacitors, discrete semiconductors, optoelectronics and various microcontrollers (MCUs) and digital signal processors (DSPs).
Average lead times for all analog electronic components have dropped by nearly 10% since the beginning of the year and maximum lead times have also decreased, signifying improved availability across all manufacturers.
Despite this positive movement, we are aware that many high-end products (both interface and op-amps) are being quoted with lead times of sixteen weeks and above. There have also been reports that prices through franchise sources are increasing and will continue to do so for the foreseeable future.
As has been the case for many months now, the supply situation for discrete semiconductors continues to be tight. In some instances, supply has become extremely critical due to demand outstripping supply. Most noticeably so for insulated-gate bipolar transistors (IGBTs), where some lead times are stretching out to 42 weeks and above.
Because of this ongoing situation, we would continue to advise OEMs to diversify their purchasing plans and work with independent distributors to bypass long lead times quoted by franchised sources.
We have also noticed that lead times for thyristors have increased, as both Infineon and Vishay have extended lead times for these solid-state semiconductors by a fortnight since our last update.
On a positive note, ON Semiconductor has managed to cut lead times by an average of 5%. The biggest decrease that we have seen reported is its range of zener diodes, with franchise sources now quoting them out at a maximum of 30 weeks, down from 34 weeks.
Also, according to our information, the general market availability of small-signal discretes has improved, with Nexperia, ON Semiconductor and ST Micro all cutting lead times. The biggest decrease seen is ST Micro, with lead times now at 29 weeks, a reduction of 9 weeks since the end of Q1 2018.
Prices, lead times and overall availability of memory products remain stable, something which might provide some relief to buyers. However, that stability is a double-edged sword as many Toshiba and Micron lines continue to be held on allocation.
Since our previous update, reports have emerged in the press that the Chinese authorities are attempting to impose price caps on memory for their domestic markets. This is a story that will likely to develop and, if successful, could have a wider impact on global supply chains. We will update when more information comes to light.
After months of volatility, the optoelectronic sector has calmed down, with no lead time changes reported between the months of May and June. However, we would expect some further movement as we head towards Q3 and Q4 2018 as the supply of various LEDs are reported as being constricted by numerous sources.
Digital Signal Processors & Microcontrollers
Lead times for DSPs and MCUs have been gradually increasing since the turn of the year and that trend shows no sign of stopping or slowing down. The market average now stands at 26.5 weeks, a rise of 7% since the beginning of 2018 and our analysis indicates that lead times for Texas Instruments’ 16-bit devices are now out at a sector high of 30 weeks.
With limited availability, many franchise distributors are requiring OEM customers to provide long-term purchasing plans in a bid to secure stock. In many cases, those who are unable to offer accurate forecasts – not to mention new customers – are finding it more and more difficult to get firm delivery schedules from authorized suppliers. Due to this, we would recommend OEMs to explore independent distribution channels, especially so if parts are urgently needed.
Lead times for programmable logic devices have dropped in the past month from an average of 18 weeks down to 17.
This one-week decrease might not seem that significant. But given that lead times in this sector increased heavily towards the end of Q1 2018, this improved situation will surely be welcomed.
The market situation remains relatively tight, though lead times are trending downwards. However, we have heard that numerous franchise sources are briefing that prices will rise again soon, unless either supply increases or demand drops.
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- Posted by Lantek Corporation
- On June 20, 2018