MOSFETs continue to be a major focus this month due to the overwhelming shortage on 8-inch silicon wafer. With the strain on the supply of wafer, low-voltage MOSFETs products (Infineon, Diodes, Fairchild/ON Semi, ST Micro, and Vishay) delivery times are bring extended with the range of 20 – 30 weeks. High-voltage MOSFETs products (Infineon, Fairchild/ON Semi, ST Micro, Vishay, IXYS, and ROHM) have increased delivery times, ranging up to the 38 week mark. Production lines that are using 8-inch Wafers and are affected by the shortage are power IC, Fingerprint IC, LED driver chips and MOSFETs.
We are seeing MLCC stock levels continue to deplete rapidly as there are massive backlogs and long lead times still in place. Murata has decommitted to filling customer backorders for high running MLCC’s causing customers to look towards alternative manufacturers like Kemet, AVX, TDK, Taiyo Yuden, and Samsung. An even higher uptick in demand is set to take place in the coming months until Murata is able to improve supply chain issues. Authorized distributors are likely looking to hold on to the Murata stock in order to fulfil existing customer back orders before taking on any new orders. Currently all incoming stock is being allocated to the huge backlog. Where stock is not being held, distributors are increasing their prices well above the market value.
The shortage on Samsung MLCC shortage persists with prices seeing increase again. Official notice was sent out to all distributors with effect from 1st January 2018. Hundreds of capacitor parts are affected with average of price increase from 50% to 80%, mostly for capacitance value 1.0µF, 10 µF and 100 µF (capacitance codes 105, 106 and 107). Lead times are still unstable as manufacturers struggle to keep up with the backlog chasm and the increasing amount of companies who are now stockpiling in preparation for even more difficult times ahead.
As the demand for smart phone upgrades continues, Walsin plans to increase their production capacity for small case size like 0201 and 01005. To date, there will be no change for larger case size capacity. We foresee the supply of case sizes 0402, 0603, and 1206 will continue to be short throughout 2018.
Walsin has also cut down 15-20% of their product allocation to distributors globally, compared to the previous figure from January 2017. Production will be hitting another setback when Chinese New Year is celebrated.
Yageo has reportedly increased their production of MLCCs to assist in the shortage. However, they’ve stopped taking orders for thick film resistors until further notice. Case sizes affected are: 0201,0402,0603,0805 to 1206. MLCC’s are generating a huge margin through the bidding system that has been implemented. Through this decision, we predict that the resistor market will be coming into an even heavier shortage period then we have seen, increasing the demand for resistors across the board.
The market-wide shortage on Broadwell Xeon processors has yet to show any signs of slowing down. Whether or not the shortages were a deliberate tightening aimed at spurring customers along to Skylake or simply the manifestation of an overly-optimistic forecast regarding how quickly Skylakes would be adopted is up for debate. We are approaching unchartered territory as past instances of shortages in this space would have been resolved by now.
Whatever the causes, the gap between what is needed and what is available on a short lead time to support said needs is sizeable. The little supply that does come available is trading well above price points we’d been seeing in October. The E5-2680v4 is now trading at a price that would have been high for the E5-2690v4 during times when supply was healthy, for instance. The premiums are so steep that we have seen demand shift away from constrained models to those that are less so, and a reversion to Haswell predecessors has been pondered given the motherboard compatibility. There is a direct correlation between how widely a model is used and the degree to which its supply is constrained. Esoteric dual processor models, namely those whose numbering is not a multiple of 10, have been largely unaffected outside of the higher end E5-2600s. The E5-1600v4 series had been tight in December, but in just the past week, constraints have flared up considerably, especially in the work station segment. Supply is more stable for the multiprocessor platforms, although pricing has edged up across the board as rebates are peeled back.
On the topic of when supply would recover, initial estimates pointed to February, which was pushed to March which is now being pushed to April and perhaps beyond. End customers are focused on their immediate needs and many appear willing to pay premiums for immediate supply after holding out until the last minute in lieu of locking in pricing on a lead time. We have yet to see an advance lead time purchase that hasn’t worked out, but the music will eventually stop and no one wants to be caught holding the bag.
Supply in the desktop segment has shown signs of stabilizing after several months of turbulence. Shortages on Skylakes have largely receded as demand tapers off, but a few Kaby Lake models, particularly the i7-7700, have seen tightness in recent weeks. We’re keeping a close eye on those as we approach Chinese New Year. Coffee Lake pricing is finally coming into line with previous generations but volumes transacted are still small. The expectation is that that will pick up in Q2.
Global demand for SSDs remained high over the past month. While Samsung was able to drop pricing on a few series, Fusion saw some major price increases on the SM863a series while supply remained heavily constrained. For SM863 series, capacities like 120, 240, and 480GBs remained short and in high demand due to wafer supply issues, and distributors are reporting that both 960GBs and 1.92TBs will be going EOL soon.
Intel on the other hand, is still trying to push the new P4500 / P4600 / S4500 / S4600 series which appear to be in healthy supply. We’re still seeing interest in older series like the S3500, S3510, S3520, S4500, and S4600 which could be a cause of CNY approaching. Demand on both 150GB and 240GBs S3520 series, which went EOL in November of 2017, increased drastically in the past few weeks from a global standpoint. On Client SSD, the 540 series is now EOL with no more support incoming from Intel. There is still some supply on 480GBs left in the channel but all other capacities are dry.
December was another month of crypto currency value rise. With that, Fusion noticed a major increase in demand for all “mining” unit hardware such as graphics cards, motherboards, UDIMMs, and mining chassis. Many brands like Gigabyte, ASUS, and PNY came out to meet the demands of customers and created “mining” focused products lines which in hopes would elevate some of the supply issues in the gaming space. Both graphics cards and motherboards remained extremely short over the past month as manufactures just cannot keep up with demand. Distributors are still limiting purchases to 1-2 units per customer and larger orders are expected to have anywhere from 10~12 week lead times. Both GTX1070 and 1080s graphics cards remain to be extremely short and in high demand globally. The recent pricing volatility in all cryptocurrencies will likely dampen demand for these products in the weeks ahead, but at the time of publication, pricing has yet to soften.
In 2018, panel makers are anticipating more pressure to maintain panel prices as oversupply is expected to continue. However, with expanding demand for high end displays and advanced substrate technology, such as in-plane switching (IPS) technology, oxide, and low-temperature polycrystalline silicon (LTPS), struggles may decrease for panel makers as they increase sell prices along with demand. Prices may also start to increase on certain panels as talks of shortages expected in Q1 and Q2 due to supply issues on driver ICs, silicon, wafers, and other raw materials. This, along with increased prices from packaging companies will only cause prices on panels to increase for the first half of 2018.
The memory module market remained mostly bullish over the past month with pricing reportedly on the uptrend. Distributors are reporting that talks between direct customers and Samsung are still taking place for Q1 pricing and are speculating that 32GB RDIMMs could reach $303 this month. Hynix distributors are reporting that the DIMM market will be even tighter this year for all SODIMMs and UDIMMs as they plan to decrease production by 40% with the majority of their focus on RDIMMs. This in turn, could cause pricing to increase on both Micron and Samsung PC DIMMs later this year. We’re still seeing consistent demand on all memory modules, the biggest runners being DDR4 2400 8GB SODIMMs and DDR4 2400 32GB RDIMMs. 2666-speed registered modules keep increasing in popularity as Intel Skylake CPUs are being used more and more for server production builds.
Memory chips are looking at continual price increases throughout the whole of 2018 (not limited to Q1) and limited stock supply. The annual growth of the DRAM market was the largest it has been in two decades due to the increasingly popular smart phones and their complimentary accessories, such as blue tooth headsets or speakers as well as high performance graphics cards meant for gaming.
The supply chain constraint, resulting from some of the larger global fabrication plants going through renovations, coupled with the intensity of the current market demand, created a perfect storm for high pricing. With the introduction and roll out of Apple’s IPhone 8 and Samsung Galaxy S8 as well as a number of other smart phone and gaming applications, the demand for these high speed but relatively inexpensive data storage cards will not be going anywhere. However, both Samsung and Hynix have made public statements that they are both independently coming out with new a new DRAM capacity sometime in 2018 and the new budget for both companies’ production over the 2018 calendar year is enormous. These two factors may lead to increased supply in products but this cannot be determined until much later in 2018. Until then, the prices will remain well above the usual market norm.