January 22, 2009

Early indications of renewed tightness on mil-spec connectors and Microsemi diodes

Converge General IC Update

December activity was softer than normal, caused primarily by some extended holiday shutdowns due to the slowing economic climate. December is typically a time when OEMs and CEMs focus on moving excess inventory - a strategy that also was affected by the economic climate in the form of greater emphasis on excess opportunities.

December did present short-term procurement problems for some customers who needed Freescale processors, which have shown tightness for several months, as well as some Broadcom networking devices such as Ethernet switches, controllers and transceivers. Altera still is experiencing some spot shortages, but some of the difficulties on Analog Devices products seem to have eased. As this trend continues into January, we also see early indications of renewed tightness on mil-spec connectors and Microsemi diodes. The tantalum capacitor shortages, driven by raw material price increases that were anticipated several months ago, have yet to materialize, while the isolated ceramic capacitor shortages we experienced through most of last year have disappeared.

Opportunities for cost savings still are in demand as companies try to take advantage of current excess opportunities in the market.

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