The second half of 2006 saw a steady increase in shortages across many product lines and manufacturers, causing more customer requirements, severe shortages and unexpected upsides to occur more frequently.
Below are some highlights of various issues that we’re seeing the most activity on:
Texas Instruments will increase lead-times
• Switches, controllers and mosfets are main lines affected.
• Lead times for these parts are stretching to 15+ weeks.
• Op Amp products from TI have been short from most of the year and that continues to be a problem.
• Op Amp lead times have stretched to almost 26+ weeks.
• Like TI, the company is seeing a shortage of mosfets for the third consecutive quarter.
• Fusion has seen a big increase in requirements and experienced long lead times through distribution channels.
• Fusion has also heard of many quality issues as the market reacts to these shortages.
• Lead times have been pushed out to 20 weeks and more.
• The shortage we saw early in the year with Intel Strataflash has now ended.
• Intel is delivering product on a regular basis and the market has quickly turned into one that can offer cost savings.
• Fusion has supplied its customers with hundreds of thousands of dollars in savings on Intel NOR Flash products in the past months.
• Spansion, like Intel, has gotten a handle on it deliveries and the market can now offer cost savings for high runner products.
• Samsung and Cypress SRAM continue to be short for the third quarter this year and that is not expected to change any time soon.
• Lead times for Cypress have jumped to 25+ weeks and Samsung to 18+ weeks.
• Fusion predicts that there will be a big jump in demand for low density SRAM on the open market since these product lines are being discontinued.
Short term: The module space will continue to be hot. Even if product appears in Asia after the holidays, there won’t be enough to fill all the holes. Feedback from direct distributors is not promising. Manufacturers are delivering less than 30% of orders. For the near term, if OEMs have spot needs they should be pulling the trigger as parts will disappear and price is rising daily.DDR2 SoDIMMs are going to see the same issues very quickly. We should see some increased activity as the holiday builds continue. Planners need to get in front of their confirmed supply now and decide where the issues are going to be before it is too late.
Long Term: The holiday season is going to keep the memory market hot straight through Q4. The manufacturers will do their best to keep things tight and keep the price high to take advantage of the demand. They will also be tight as many fabs are switched over to keep up with NAND and other flash products for consumer electronic builds. The margins are much higher on these products, versus DRAM or modules, so they will build accordingly.
Short term: Expect 5xx to stay relatively active as OEMs are still enjoying the cost savings from the prior direct cost. The market should tighten up, though, as Intel definitely wants to move past these and concentrate more on the dual-core technology.
There is another interesting price drop coming at the end of October on the 820 processor. This has been a very appealing dual-core since the price dropped to $109 in July. Expect a feeding frenzy as it drops down to $89 and OEMs fight to take advantage of the savings. Best bet is to get orders in on these early and try to lock in on product as close to the $89 mark as possible. Once the rush comes the price will surely jump over $100.
Long term: 2007 should be an interesting year for Pentium availability as Intel plans to stop production on many of very popular processors including 630, 640, 521, 524, 541 and 820 among others. This could cause serious issues as OEMs are still building with these with consistent volume. OEMs that haven’t fully specced in the Conroe processors will have major supply issues getting Pentiums that they are currently building with.