Fusion Worldwide Greensheet

October 9, 2018


The MLCC shortage is still projected to extend well into 2020. According to one of our suppliers, 22% of all MLCCs had lead times extending for 6 months or more and as a result, MLCC manufacturers are raising price by as much as 40-50%. As resources and production capacity remain limited, many manufacturers continue to shift toward prioritizing the production of smaller, more economical case sizes. These small case sizes are used heavily in the smartphone market where Jabil estimated 1.5 billion smart phones are manufactured a year with each requiring around 1,000 MLCCs. Numerous manufacturers are already looking into investing in the production of smaller cap sizes such as the 0201, 01005, and 008004. Complicating matters, a few sources are predicting that many newly released parts could be made obsolete as soon as the end of this year, which has left some distributors hesitant to bring in certain parts without clear demand. With the focus shifting to smaller case caps with high capacitance, many larger case size MLCCs such as 0603, 0805, and 1206 are already being flagged by many as “not recommended for new design.” Market activity in recent weeks has centered on these larger case sizes. We’ve heard numerous reports of the Chinese government working with Murata to bottleneck the material so they could get a handle on the counterfeits. Anything incoming or outgoing from China is subject to inspection. More price increases for Murata MLCCs are coming as well. An audit of distributor inventories showed that levels were so low a price hike was warranted.

Thick film chip resistors remain active, particularly case sizes 0805, 0402, and 0603, due to raw material shortages and increased demand. Vishay, KOA, and Panasonic are the biggest manufacturers for these case sizes. Yageo has actually been one of the better suppliers throughout this shortage as far as stock position and lead times are concerned. Vishay, KOA, and Panasonic have the worst lead times. 0805 case sizes have gone from an 8-week lead time to 20-22 weeks, and some of the case sizes are 80+ weeks. Yageo lead times are around 24 weeks for most lines as opposed to a 10-week lead time from the beginning of the shortage. For perspective, normal lead time is 6-8 weeks.

Lead times on KOA resistors continue to soar well into Q4. In an attempt to close their production gaps, customers switching from other resistor manufacturers like Yageo and Vishay have only increased lead times and put more strain on supply. Case sizes 0805 and 1206 have noticeably been hit the hardest, with standard lead times increasing from 40 weeks up to 125 weeks. Although the outlook on KOA lead times shows no sign of improvement, certain case sizes are still available on general lead times. KOA is currently building a new production factory in Japan, and this project is due to be completed by mid-2019. In a bid to help stabilize and prepare for higher demand, this new factory will focus on production of Thin Film resistors (NR73 series). Overall, the situation with resistors is not as severe as what we have seen with MLCCs because the differences in electrical values in resistors are narrower and therefore, alternate parts can be more easily swapped in.

The global supply of MOSFETs remains very tight, mainly due to increased demand in new applications and insufficient supply of wafers. Some distributors foresee the shortage will continue until Q2 2019. For low-voltage MOSFET IPB/BSC series, the next year’s production capacity is already fully occupied, and for some high-voltage MOSFETs, including the IPA/IPB/IPD series with suffix CFD/C6/C3, lead times have stretched to 36-49 weeks and allocation is hard to come by. ST Micro Power MOSFETs (SMA/SMB/SMC) in both automotive and non-automotive versions are looking at lead times of over 40 weeks with increasingly constrained inventory and backlog. The ST Micro M2, M5 and K5 MOSFET series are currently the most aggressively priced in the market with the best available specs, though the demand for them is very strong and STM are at capacity.

In the diode market, we are seeing price increases and lead times stretched across all big makers like ON Semiconductor, Infineon, Vishay, Nexperia, and Toshiba. For Nexperia, SOT 323, SOT 123, SOD 1608, SOT 363, and SOT 89 all have lead times stretching beyond 26 weeks. The majority of these packages are with ESD protection that are suitable for automotive and industrial applications, including car infotainment, body control modules, video cameras, industrial computers, and test and measurement equipment. This makes us deduce that shortages are driven mainly by booming demand from the automotive sector. We’ve seen a huge spike in activity in TVS Diodes (PESD*CAN*; PESD*V*L2BT; PESD1FLEX), Voltage regulator diodes (BXZ84-series), Zener Diodes (BZT52-series), Schottky Diodes (PMEG2005), and transistors (PUMH10, PBSS4xxx). Lead times are not expected to improve anytime soon. Taking advantage of insufficient supply of upstream materials and capacity of wafers, Diodes Incorporated has recently announced the price adjustments with an average of 20% increase due to higher semiconductor material costs. The price increases apply to all products and is non-negotiable. Standard lead times run 8-12 weeks, but some specific families’ lead times are increasing to more than 20 weeks. We have seen a steady surge in demand for Toshiba IGBT Diode optocoupler (TLP series) in the past couple of months. Prices are an average of 20% since June 2018 and another 10% hike is expected starting in October. Supply output from the manufacturer is steadily dropping and lead times have stretched to 16-20 weeks.


September brought about drastic increases in PC CPU pricing, with some models trading at 35-40% higher than what they did in late August. It’s no wonder that many customers have reported projects or orders being canceled outright given the lack of margin in the end product to absorb this type of PPV. Whether pricing can go much higher remains to be seen – already we’re in unchartered territory – but suppliers are not expecting recovery to come before the end of Q4. Anything that is manufactured on the 14nm process has been affected. The delayed launch of the 10nm process, an unexpected increase in demand, and higher core counts in processors, which cuts into wafer output, have all created this current shortage. The fact that Intel is bringing production of its 14nm XMM 7560 modems online for Apple does not help the situation. The multiplicity of phenomena at play means that we haven’t yet seen the peak and that normalcy is a long way off.

For mobile CPU, supply is extremely scarce and decommits on orders are very common across Skylake, Kaby Lake and Kaby-R Core models. Several weeks have passed since we have last seen offers in the market on anything substantial for mobiles, including Atoms and Celerons, which are not expected to recover until the end of Q2 2019. At least with desktop products, the supply is out there, albeit at borderline astronomical price points, which has impacted order velocity of late. Support for Core models has been given priority to the detriment of Celerons but the price premiums across all models and segments do not discriminate. Chipset supply has been so impacted that the H310C, manufactured on 22nm die, has been offered as a replacement for the 14nm H110 and H310 desktop chipsets. New product launches are prone to difficulties and we expect Whiskey Lake mobiles and Coffee Lake-R desktops to face a troubled launch next month considering the current circumstances.

The Xeon shortage has shown some signs of breaking in recent weeks but it is difficult to determine if this is a momentary lull or a sign of overall supply improvement. The pattern of shortage to recovery; back to shortage again has played out with such frequency over a variety of Bronze, Silver, and Gold models that any improvements are difficult to trust. The seasonal demand increase we typically see as year-end approaches could be all the market needs to send supply back into shortage. The Alternative SKU matrix, which spells out which Broadwells and Haswells could be used as substitutes for each Skylake model, has reappeared, which might portend more trouble ahead.

For all the talk of AMD taking market share from Intel, we have yet to see much of an increase in inquiries or availability for AMD product in the market. We know that EPYC and Ryzen offerings have been pushed to end-customers as a means of getting boxes delivered more quickly, especially on large volume orders. AMD has sufficient capacity to take on an influx of orders should a more substantial migration take hold but it is more likely that the shift will be gradual. Whatever the pace of change, the landscape should look markedly different by the end of 2019.

Finished Goods

Nvidia recently announced the release of the RTX 2070, 2080, and 2080Ti version cards. Even though these parts aren’t readily available to ship, distributors and brokers are starting to scramble to move the older series cards out of their systems to make way for the new ones. As we have seen in the last few weeks, pricing has steadily declined for the older series cards. We have received several inquiries on the GTX 1080Ti due to late deliveries on the RTX 2080Ti in the early going. The spread in pricing between the two is significant and the late deliveries are likely to drive up pricing on both series in the short term.

SSD pricing continues to slide and the average contract prices are expected to fall in Q4 by 10% due to aggressive price strategies by vendors and surplus production capacity. One thing to keep an eye on in the weeks ahead: a number of suppliers are reporting delays in shipments on Intel SSDs, particularly the S4510 series. Western Digital has officially EOL’d 1TB and 2TB Gold Edition HDDs. Last time buy date was August 31st. WD has also let their distribution partners and customers know to start transitioning to HGST for this type of drive. The problem is that the pricing is higher for HGST vs. what they were paying for WD. Activity has picked up significantly on these SKUs (WD1005FBYZ & WD2005FBYZ). There are a few hundred pieces available of each SKU that is up for grabs at the moment.


The increased production capacity that was prompted by sustained shortages for all memory products tracing back to the summer of 2016 has finally given way to oversupply in the market. DRAM prices are now approaching an inflection point, and previous estimates of a 2% drop in Q4 contract pricing may still be revised lower due to the shortage in Intel CPU cutting into the number of PC shipments. September demand has been flat, and buyers are on hold in anticipation of new Q4 pricing. DDR4 demand is particularly weak and all transacted prices have come in lower than recommended sell prices. Demand forecasts that were loaded in expectation of higher pricing at the end of the year (earlier this year one venerated report envisioned pricing for 32GB RDIMMS to push north of $350 by year’s end) have been revised downward by as much as one third in the case of a large server customer.

Whereas consistent supply had been the focus for so long, keeping inventories lean and minimizing risk buys has taken precedent in this deflationary environment. The prospect of cost savings is less appealing if waiting could yield even more advantageous pricing. We had seen enough activity in recent weeks to discern that market pricing had dipped below contract pricing for many tier-2 customers, but that has abated in the new quarter. The lower end of the market has seen some penetration by Chinese and Taiwanese brands which has added to the pricing pressure faced by the oligopoly. Increased demand from the automotive, IoT, industrial, and networking segments for memory products has not been the escape valve the big three might have hoped as customers from this space are requesting more specialized memory solutions instead of more commonly used products. Just as stock market bubbles take as long to recover as the runup, the memory market may not see another period of high growth until 2021.