May 12, 2010

Lead times and shortages remain steady

Converge Semiconductors and Integrated Circuits Update.

Lead times on most of the shortage items Converge has been tracking over the past six to eight months have remained steady. There are some products, most notably the TI TPS data converters and MSP430 series microcontrollers, that are seeing some easing in lead times, although it’s too early to tell if this is temporary due to a slight dip in overall demand during the past several weeks. Lead times continue to be long, however, in their DSPs, as some products are out to 28 weeks with open market prices climbing to record highs. Optoelectronic lead times remain steady in the 16-to-24-week range. Some families of On-Semi diodes are still tight, while others have loosened slightly. Microsemi diodes are still the kings of stretched lead times, with some pushing out over 50 weeks. AMCC has joined Atmel, Infineon, Freescale and TI with some microcontroller lead times out over 20 weeks.

Many of the spot shortages we have been tracking have been resolved by product “trade off” in the manufacturing process, allowing for delivery on some products while forcing others to go short. Chip manufacturers are still not sold on the strength of any global recovery and as a result continue to hold back on increasing capacity. Instead they are opting to make the best of what they have currently available. This is causing the easing of lead times of specific chips within a product type, while allowing for deliveries of others within that same product type to lengthen. In other words, shortening the lead times of a part that has been a problem at the expense of another.

All in all, barring an unforeseen downturn in the economy, we expect more of the same market conditions we’ve been watching for the past six to eight months to continue through the summer build season.

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