Fusion Worldwide Greensheet

September 12, 2017

IC

As the strain on resistor, diode, and MLCC supply continues, we have seen increased demand from both OEM and automotive EMS. Large OEMs are strategically buying ceramic caps in large quantities to protect themselves from seemingly inevitable shortages coming in the approaching calendar year. There has also been a sharp uptick in the demand for parts from lesser known manufacturers as OEMs attempt to tap into product availability that accomplishes the same tasks. Our expectation is that the gaps will continue to widen into Q1 and Q2 of 2018.

We are hearing from Taiyo Yuden Distributors that they are having large supply constraints in the MLCC domain. This is on top of Murata and Vishay issues that we have already been experiencing. Beyond the increased automotive demand we have already seen, Taiyo Yuden has also accepted an Apple contract to supply material for the new iPhones. The result of this is an increased production effort being allocated on a larger global scale to keep up with the demand. Samsung is dealing with supply issues across all passive materials and there is no indication as to when production will catch up to demand. On top of the long lead times, we have also recently experienced price hikes, especially in the Samsung MLCC’s (CL05B-, CL10B-, CL10C-). Major price increases began in August of 2017 and market prices will likely continue to increase due to sheer volume of demand and lack of supply. Distributors are having a hard time keeping up with the influx of orders from all sources and are sticking to the lead times and incoming stock promised by the manufacturers.

Vishay CRCW parts with TK100 1% or lower are affected and we have also been seeing an increased demand for the MMA/SMM range with little availability on the open market. The delivery times for the Vishay thick film R-chip resistors has stretched to 90 weeks which is placing considerable strain on customers. Vishay is expecting to see some improvements across their other production lines of thick film resistors from the Israeli production site now that they have officially placed the R-chips on allocation.

Aside from passives, many semiconductor level components are facing major supply constraints as well. After Microchip and ATMEL merged we are now hearing that they are looking to consolidate their distribution network. They are considering shrinking the distribution channel meaning that some distributors may lose their franchise status. Meanwhile AT24/25/49 series flash memory is on high allocation and EEPROM price jumped approximately 30%.  PIC16C5X, PIC12CXXX and PIC16C7X series lead times have stretched to 15-18 weeks, as compared to the previous standard of 8-12 weeks.

For several months now, available stock for Cypress/Spansion parts has been dwindling, with distributors citing heavy allocations. Lead time pricing on these parts has increased at least by 50% as a result. Some distributors have noted they’ve been instructed to “no bid” any parts to new clients due to auditing from the manufacturer, this includes lead time offers. In addition, gate drivers from ST Micro, On Semi automotive parts, discrete semiconductors and other manufacturers are also having supply issues. Cypress / Spansion NAND Flash (S34xx) and some items of NOR Flash (S29GLxx / S25FLxx) are on strong allocation as well.

CPU

In the enterprise segment, supply challenges for higher end E5-26XXv4 have persisted. Still, more than a few suppliers have reported some level of optimism in supply trends for the months ahead. Trading activity in the Skylakes has been slow to take off. The uncertainty created by the changes in how each model is numbered, which has prevented forecasters from using benchmarks from previous versions, has put a damper on product movement. It remains unclear which SKus will be the high runners and distributors are hesitant to make moves until there is certainty with the forecasted demand.

The mobile market has perked up a bit in recent weeks. With the Kaby Lake Refresh launch, a number of Skylakes are now constrained. The most affected SKus have been the i5-6200U, i5-6300U and i7-6500U. We expect these issues to persist into October. Desktop has been the most volatile segment in recent months and August saw more of the same. While the G4560 shortage has seemingly abated, distributors are reporting that the i3-6100 and i5-6500 are expected to face supply constraints into October. The G1820, G1840 and G3260 have been challenging in the same manner and should remain so through the upcoming Golden Week holiday. The Coffee Lake desktop SKus have just begun to trickle into the market as 6 models launched (i3-8100, i3-8350K, i5-8400, i5-8600K, i7-8700 and i7-8700K) with the i5-8500 to launch at a later date.

Finished Goods

Another month has passed and little has changed in the SSD market. Distributors are still fighting with manufactures for allocation and lead times are still being quoted around 4-6 weeks for large quantity orders. For Intel, the older series like S3500, S3510, and S3520 are still short with Intel only releasing small pockets of inventory to various distributors around the world. Newer series like the S4500 and S4600 seem to be easier to procure from an allocation standpoint, but only in small quantities and without any special pricing. Over the past month we’ve seen an increase in requirements on Intel’s P3700 series with PCIe NVMe 3.0 x4 interfaces for both 400GB and 800GB. Supply on Samsung SSDs seems to be slightly better than Intel through most distribution channels however market analysts expect supply to get much tighter in Q4. While the PM863 and SM863 series have been in high demand over the past few months, we’ve seen multiple requirements on both PM863a and SM863a for both 960GB and 3.8TB capacities.

As expected, supply remained tight while pricing increased slightly over the past month in the LCD market. We’re still seeing daily requirements on all notebook and desktop size panels, majority being 15.6”.  With holiday season around the corner, panel makers have been increasing production for future notebook, tablet, and TV demand.  Distributors are now reporting that panel manufacturers have started prioritizing their allocation to the larger OEMs orders causing supply to remain tight in the open market. As global sales of notebooks continue to decline, TFT-LCD sales have been rumored to be decreasing more and more each day.

Memory

While memory module pricing appeared to be somewhat stable for the majority of August, pricing has started to increase across the board over the past week with rumors of increased pricing beginning on the first of the new month. Hynix distributors are anticipating a 5-8% increase on all SODIMM and UDIMMs which is causing many distributors and brokers to hold off on selling stock into the open market until pricing increases take place. While module activity over the past few months have been heavily focused on registered DIMMS, we have has seen heavy activity the past week in the open market on both 4GB/8GB, 2133/2400, SODIMM and UDIMMs.

In the enterprise space, both 16GB/32GB RDIMMS are still hot and in high demand. With slightly more 32GBs available in the market, 16GBs seem to be moving faster with large amounts of stock being sold as soon as they leave the manufacturer and before they reach distribution. Distributors are reporting that Samsung is set to increase pricing by 2-3% on all RDIMMs and we are anticipating both Hynix and Micron to follow suit. With the majority of production focus still on the new 2666-speed modules, we’re starting to see more 2666 speed offers than 2400 speed (especially as manufacturers start to phase them out). With no indication as to when the market will fully correct itself, we’re anticipating shortages and pricing issues to last well into 2018.

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