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Locked on 05/19/2021 10:30:00 PM PDT by Sidebar Moderator, reason:
Bloomberg |
Posted on 05/19/2021 10:07:52 PM PDT by blam
NEW YORK (BLOOMBERG) - Shortages in the semiconductor industry, which have already slammed automakers and consumer electronics companies, are getting even worse, complicating the global economy's recovery from the coronavirus pandemic.
Chip lead times, the gap between ordering a chip and taking delivery, increased to 17 weeks in April, indicating users are getting more desperate to secure supply, according to research by Susquehanna Financial Group. That is the longest wait since the firm began tracking the data in 2017.
"All major product categories up considerably," Susquehanna analyst Chris Rolland wrote in a note on Tuesday (May 18), citing power management and analog chip lead times among others. "These were some of the largest increases since we started tracking the data."
Chip shortages are rippling through industry after industry, preventing companies from shipping products from cars to game consoles and refrigerators. Automakers are now expected to lose out on US$110 billion (S$146 billion) in sales this year, as Ford Motor, General Motors and others have to idle factories for lack of essential components.
The industry and its customers watch lead times as an indicator of the balance between supply and demand. A lengthening of the gap indicates that buyers of semiconductors are more willing to commit to future supply to avoid a recurrence of shortfalls. Analysts track these numbers as a harbinger of hoarding that can lead to the accumulation of too much inventory and sudden declines in orders.
"Elevated lead times often compel 'bad behaviour' at customers, including inventory accumulation, safety stock building and double ordering," Mr Rolland wrote. "These trends may have spurred a semiconductor industry in the early stages of over-shipment above true customer demand."
The situation has been complicated by a resurgence of coronavirus cases in Taiwan, a key location for chip manufacturing. The island has closed...
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(Excerpt) Read more at straitstimes.com ...
It takes 12 weeks on average to make a chip. To ramp up production takes 24 weeks. The shortage is going to last awhile.
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