• Contrary to many headlines, we are not experiencing an end to the global chip shortage for Analog power and signal commodities. Unprecedented demand continues to be tempered by supply chain constraints in substrates, components and foundry. Russia’s invasion of Ukraine has put supply markets in turmoil and crimped supplies of key materials along with long lead times for equipment used to make semiconductors.
• There are fears around inflation which could lead  buyers and consumers to be more cautious with their cash. This downturn in the consumer market has led to a reduction in demand for semiconductors used to support these products. 
• Demand for smartphones, consumer products, and PCs has dropped significantly. This has resulted in many companies holding too much inventory, some backlog cancellations and demand push-outs due to questionable booking activity and wrong inventory mix, along with “stranded inventory” or waiting for a completed BOM.
• With consumer market uncertainty, the demand in the automotive and industrial segments is still growing strong. The shortage of automotive grade parts will likely remain through 2023. Due to power shortages in the Sichuan region, the local government forced factories to cease production, with output significantly impacted.
• To discourage double ordering, many suppliers are requiring customers to lock in long-term, non-cancelable orders. Most capacity investments won’t increase production volumes until later in 2023. 
• A new and rising concern for 2023 is the possibility of overcapacity for chip production, especially with components used in the notebook/consumer space. We need to continuously monitor inventory levels to avoid creating additional inventory liabilities.

Texas Instruments

• TI has continued to experience supply challenges due to a wide variety of factors, some outside of TI’s control, including unprecedented and fluctuating demand as well as Covid lockdown measures which has disrupted global supply chains. Every single TI customer is being affected with the same issue, and no customer is immune to the situation. These issues have impacted their ability to meet requested dates, provide accurate ship dates and identify impact to production builds.
• TI can support up to 78 weeks of rolling JIT forecast. It is vital to provide long term forecast visibility in view of the current constrained market.
  • Critically constrained on LBC5, 6, 7, 8, 9 wafer processes. Lead times have stretched to 52 weeks or more. (MPNs: TLCxx, TLVxx. TPSxx, DRVxx ).
  • Highly constrained at the backend and assembly facilities.
  • Major leadframe shortages.
  • Major package constraint: QFN.
• Capacity Expansion: Investing in new capacity in 2021, 2022, 2023
  • Backend Assembly: Chengdu – 300,000 Square Feet (Doubles Existing CDAT A/T Capacity) – Ready: Melaka (TIEM2) New probe, bump and A/T facility - Factory construction to begin in the second half of 2022.  
  • Front End Fab:
  • Richardson Fab 2– 300,000 square feet (30% larger than RFAB1) – Ready second half of 2022
    • Will add $5B worth of advanced analog capacity
    • 300-mm (LBC9 & LBC9PLV)
  • Lehi Fab – Acquired from Micron. Advanced Analog and Embedded Processing –Ready in 2023
    • 65-nm nodes (F65/C021)
  • Sherman Fab (Texas) –Ready in 2025
    • Size of 4 RFAB2
    • 300-mm

Monolithic Power Systems

• MPS  has increased lead times to more than 50 weeks for both standard & automotive products.

Microchip

• Microchip continues to face accelerating demand that outstrips supply. Lead times have increased to 60 weeks for standard products and 62 weeks for custom products.
• Microchip announced a Preferred Supply Program (PSP),  which is designed to deal with the supply constraints impacting the electronics industry.

onsemi (recent rebrand from ON Semiconductor)

• Market demand exceeds supply. onsemi is facing tight supply and backend constraints. Lead times continue to stretch significantly. They are strongly encouraging customers to extend orders and forecasts deep into the first half of 2023. 
• Standard Analog:  AC/DC , DC/DC , Interface (RS232, R485), VR, LDO, Driver, Mixed Signal/Amplifiers and Comparators all quoted at 50 weeks lead time.

STM

• Lead times continue to stretch. Need long-term forecast and backlog coverage well into 2023. STM OEM sales has been communicating the same (extended lead times) announcement to their respective end customers.
• Power management, AC/DC, DC/AC, Mixed Signal Amplifier & Comparator, Standard Analog VR, LDO, Drive all quoted at 74 weeks lead time. All parts are on NCNR terms.

Renesas

• With immediate effect, Renesas has imposed a new policy for all products (ex-Renesas, ex-Intersil, ex-IDT and ex-Dialog). This policy will impact all RFQs, as well as new and existing orders. Request dates within the current quarter and next quarter cannot be pushed out and for upon approval of a cancellation, a 30% surcharge may be applied. 
• There are backend assembly & test constraints in Malaysia due to resource limitations caused by local Covid regulations.
• Lead time: 52 weeks.

Diodes

• Lead times are stretching due to tight capacity in both front-end and back-end production.
• Lead time 40 to 60 weeks.

ADI

• ADI is facing unprecedented strong demand and constraint at both front and backend support. 
• Lead time: 50 to 90 weeks.

Foundry/OSAT update

• Limited investments on 8-inch capacity growth.
• 12-inch capacity expansion mainly on advanced nodes.
• ADI investments - $900M CapEx to expand internal 8-inch capacity. 12-inch strategic opportunities are being reviewed.

Assembly updates

• Significant CapEx by OSAT partners have increased capacity in assembly.
• Additional CapEx decisions in progress.
• ADI response: Long-term agreement with OSAT partner. Co-investment with leadframe and laminate supplier.

• Today’s unprecedented demand for semiconductors is driven by accelerating digital transformation. Wireless/5G, IoT, and automotive are the most important applications driving increased demand over the next few years.
• Foundries will exhibit another strong year in 2023, driven by the increasing demand for 5G phones, automotive and high-performance computing. 
• The launch of supportive government initiatives to develop infrastructure for electric vehicles is further contributing to the growth of the analog IC market.
• The industrial application segment is estimated to grow steadily.

Unprecedented cost increases throughout the supply chain such as raw materials, foundries test and assembly, logistics and labor cost are impacting semiconductor pricing. Several manufacturers have been forced to raise their prices in the second half of 2022. 

The invasion of Ukraine may further contribute to increased prices of semiconductors. It is still unknown how the crisis will impact various materials and energy prices in the long term.

• Analog Devices: Price increases have been announced on products in the combined ADI and Maxim portfolio. These price increases apply to both Direct and Distribution orders from September 25, 2022 onward – increases vary depending on product. 
• Renesas: Increased by 10 to 20% for the former Intersil legacy products across all customers.
• STM: Price increases of 10~15%  applied in the second half of  2022 directly with end customers. 
• onsemi:  Price increases of 10~15% and a defocus on legacy devices.
• TI: Price increases of 10~15 % by end customer.
• Microchip: Price increase between 10 and 15%.
• Rohm: Price increase of 15% .
• Future price developments are directly linked to each suppliers' capacity status, which requires continuous monitoring.

• There is a sign of demand weakness in end markets such as smartphones and PC shipments.
• Forecasted semiconductor sales are expected to slow in 2022 and again in 2023.  
• Inventories are recovering and some lead times are beginning to shorten for specific package types. 
• Booking rates are slowing. This should result in more wafer availability across the industry. 
• Production output continues to increase each quarter for automotive, however, still short of fulfilling the strong demand booked through the first half of 2023.
• Capacity utilization: Current loading is moderately high.
• Lead-times: Lead times average around 39 weeks, depending on package type. SOT 353, SOT 363, and QFN are facing allocation and still in short supply. The constraints and shortages are not over yet.

• A steep decline in PC and smartphone demand is visible, but do not expect an oversupply of semiconductors as demand in automotive, industrial and medical remains robust. 
• Gartner forecasts 2022 semiconductor revenue to be $639.2 billion but expects a reduction to $623.08 billion in 2023. This drop is primarily impacted by weak sales of mobile phones, personal computers and ASP erosion.
• While the consumer space will slow down, semiconductor revenue from the datacenter market will remain resilient for longer (20% growth in 2022) due to continued cloud infrastructure investments.
• The automotive segment will continue to record double-digit growth over the next 3 years as semiconductor content per vehicle will increase due to the transition to electric and autonomous vehicles

• Price trends: Pricing has been flat to up due to raw materials (wafer and lead frame) cost on parts supply to high demand end markets. There is still an imbalance in supply/demand, especially in the automotive and industrial segments.
• The entire semiconductor industry’s supply chain, including wafers and leadframe, continues to face a shortage of raw materials or insufficient production.

• China manufacturing has slowly recovered after major disruptions due to Covid-19 in Shanghai and multiple other cities. This continues to be a concern. Europe’s economy continues to be impacted by inflationary pressures and the energy crisis due to the invasion of Ukraine.
• While mobile and consumer markets continue to weaken, the PC segment has also seen a drop in demand.
• With multiple markets slowing down, inventory pressure is mounting among distributors and brokers for commodity parts and the risk of inventory dump is increasing.

Average Lead Time Based on Technology 

Infineon book to bill remains well above 1 and backlog remains strong. Lead times trend remain stable but well above 52 weeks. Infineon is implementing another round of price increases.

• onsemi continues to see improvement in lead times and the percentage of constrained/highly constrained parts has dropped to 51% of the supported PNs compared to the previous quarter. Overall improvements are for commodity parts used in the consumer and mobile markets while the industrial and automotive markets continue to see healthy growth.
• onsemi’s market strategy of focusing on industrial and automotive, which contributes now to two thirds of their revenue, is clearly paying dividends.
• Lead times are reducing for standard rectifier, Zener diodes, Schottky but increasing for Mosfet.
  • Capacity Expansion:
    • Front End:
      • Continuous investment in new capacity
      • Transition all production to multi source 200mm wafer
      • IGBT +20% on 200mm capacity growth
      • FET +15% on 200mm capacity growth
      • Partnership with external partner to establish a 300mm wafer fab
    • Backend Assembly:
      • Expansion of 50K sq ft assembly and test capacity per year
      • Expansion of Power discrete and module multi-source capabilities

Demand for STM products remain strong, and their 2022 capacity is fully booked. However, due to overwhelming backlog, the supply is well below the demand.

Superjunction, planar, IGBT, IPM & SIC average lead time is 50-52 weeks while Bipolar lead time is much better at 22-26 weeks. 

Nexperia remains on allocation for the majority of parts. The small packages intended for the mobile market such as micro-CSP and thin-QFN are off allocation. 

• Capacity Expansion: Increasing global front-end and back-end capacity
  • Front End:
    • Wafer fab in Hamburg (Germany), Manchester, and Newport (UK) – Ongoing conversion from 6 to 8 inch. 
    • Nexperia also continues to negotiate and add external foundries for additional wafer capacity.
    • New 300mm (12 inch) wafer fab in Lingang (Shanghai) is scheduled to be online from the middle of 2024.
  • Backend Assembly:
    • Expanding in Dongguan (China) factory.
    • Investing extra capacity in Cabuyao (Philippines) and Seremban (Malaysia).
    • Implementation of advanced automation.

Diodes Inc lead time is improving for some packages, with demand dropping for some packages such as SOT-23, SOD-123, SO-8, and PD3333 - the capacity is starting to catch up with the demand.

• Lead times from 52 – 60 weeks.
• External fab partners’ utilization is more than 100%.
• Capacity expansion: Year-over-year expansion of more than 20% for 150mm wafer capacity compared to 2021.
• Vishay’s diode lead time is improving slightly while MOSFETs remains the most constrained product within their discrete portfolio with lead times increasing to more than 100 weeks.

• Inflation remains the greatest concern as we think about the overall market. The market is closely watching the stance and what action the US Federal Reserve takes. An excessive increase in Federal Reserve’s interest rates may trigger a worldwide recession and cause a dramatic drop in demand.
• Turmoil in the cryptocurrency market caused a huge drop in demand for graphic cards, thus causing the market price for graphic cards to drop 15% with resellers dumping stock. This provides further relaxation in component demand following the softening of the mobile, consumer, and PC markets.

• Contradicting expectations of cost reduction due to weaker consumer and mobile markets, suppliers continue to indicate their intention to continue to increase prices.
• The increased costs are predominately driven by inflationary headwinds.
• Pricing on legacy Diode and Transistor technologies is increasing by 20% year on year and have a higher risk of being classed as EOL.

• The supply situation remains very constrained for Opto couplers, InfraRed (IR) devices and selected visible LED families including Circuit Board Indicator (CBI), Display module and through-hole lamps going into Q4 2022, driven mainly by an upsurge in semiconductor demand across growing market sectors such as industrial, automotive, communication and networking as well as enterprise infrastructure. Lead times are stretching out to beyond 18 weeks for Asian manufacturers, and up to 52 weeks for US and Japanese manufacturers. Customers are strongly advised to place longer-term order coverage for critical and sole source items through to the first half of 2023, to lock in capacity and prevent a supply interruption. 
• More single source semi-customized LED manufacturers, such as VISUAL COMMUNICATIONS COMPANY, PANASONIC, NICHIA & DIALIGHT, were announcing EOL of their legacy products used in our on-going production without adequate advanced notice, LTB notice, and recommended replacement. Some Asia-based LED makers have also implemented end of life status on products using Cree die as Cree continues to de-commit deliveries. Customers are advised to work closely with us to qualify Jabil preferred suppliers to mitigate supply risks.
• Growth area for invisible LED sectors: IR receiver for products like set top boxes and smart metering, couplers for DC power supply, data communication, cloud computing, optical sensors for printers, mobility, life-style wearables & automotive applications. Demand for UV LED is picking up as countries begin testing generic UV light sterilization in places with high human traffic such as shopping malls and subways.
• Capacity utilization rates for many leading LED manufacturers with Asian production bases (Thailand, Philippines, Malaysia, Taiwan, etc.) are still constrained, as these sites recover and are clearing order backlog from the pandemic shutdown. There is still capacity available if our preferred suppliers are qualified to quickly ease constraints from Osram, Vishay and legacy suppliers like Broadcom and Japanese suppliers. Asia based, leading automotive LED maker, Samsung Electronics is aggressively trying to penetrate the European and US markets with better and lower cost solutions than existing automotive suppliers like Osram, Panasonic & Nichia.
• As much visibility should be given to the suppliers as possible, especially for extended lead time products like couplers, to avoid any potential supply issues.

• The Opto coupler market has been consolidating with low end couplers (photo transistors) dominated by Asia- based suppliers like Lite-on, Everlight and CTMicro.
• Broadcom, the leading global supplier is still dominating the high-end, high-speed IC couplers market.
• Prominent China indigenous (top 4) LED manufacturers MLS, Foshan Nationstar Inc., Honglitronics and Refond continue to gain share amidst pandemic driven shortages. 
• Prominent automotive LED supplier Panasonic is exiting the market by selling the business to Nuvoton Technology Corp from Taiwan. AMS acquired Osram to become one of the leading sensor and lighting semiconductor companies.

• Pricing for all SMT LEDs from Asia-based suppliers will stabilize in Q4 2022, however, there will still be some price increases for Circuit Board Indicators (CBI), light pipe and opto couplers due to the rising costs of raw material and substrates (driven by acute shortage in semiconductor supply base globally), as well as freight charges. Increased demand across all major market sectors, most notably in the automotive sector, has contributed to the supply crunch. Customers are strongly advised to work with us to qualify Jabil preferred suppliers especially for sole source sockets to mitigate the impact from price increases. In China, pressure driven from higher labor costs is affecting price levels on labor-intensive parts, display and housing LED or through hole parts. As a result, our low-cost Asian suppliers have struggled to deliver competitive pricing. This is particularly prevalent on high volume products such as smartphones and white goods. 

• DDR4: Constraints 
• DDR3: Constraints but with some available production options.
• Legacy (SDRAM, DDR1,2): Stable  (Look to 2nd tier suppliers for support).

• Analysts predict market stabilization in the first half of 2023 with limited bit growth but AI and 5G gradually rising, however uncertainty currently remains in the market and factories are still reporting a lack of capacity.
• Demand is still exceeding production in Q4 2022, but there are opportunities to capture supply.
• Suppliers are reporting spare capacity in DDR3. Look for support from some suppliers.
• The invasion of Ukraine is not likely to cause impact to raw materials that would impact memory supply.
• Server demand continues to increase but PC and handset demand has flattened moving into Q4 2022. 
• Look for and take advantage of short-term lower pricing opportunities and over supply opportunities. 

• DDR4: Some Increases
• DDR3: Some Increases.
• Legacy (SDRAM, DDR1,2): Some Increases.

• Asynchronous:
  • Low Power: Stable
  • Fast SRAM: Stable
  • Slow SRAM: Stable
     
• Synchronous:
  • Quad Data Rate: Stable

• Overall SRAM TAM is stable.
• Balanced supply and demand conditions still exist in the marketplace today.
• Balanced market conditions are expected to continue throughout the first half of 2023, expect lead times to stay extended due to increased orders on suppliers.
• Look to tier-2 suppliers to help with tier-1 constrained suppliers.

• Asynchronous: Stable.
• Synchronous: Stable.

• Planar NAND: Constraints. 
• 3D NAND Flash: Allocated.

• Contamination issues at the joint Western Digital/Kioxia Nand factory are still impacting up to 6.5 exabytes of flash memory. Expect a ripple effect in all manufacturers especially those producing 3D Nand. Product is still being allocated.
• Expect 5% pricing increase in NAND Flash product and related products using NAND Flash. (eMMC and SSD’s).  Several manufacturers have already announced the increase.
• Controller chips are allocated causing delays and allocation issues at major suppliers of SSD’s, eMMC. Memory Cards and USB devices. 
• The invasion of Ukraine is reportedly not likely to cause further impact to Flash production or pricing, but customers need to be kept aware should impacts arise.
• Short term demand has increased as production in China and automotive markets are back online. Provide suppliers as much forecasts and hard orders as possible to ensure supply.

• Planar NAND: Increases.
• 3D NAND Flash: Increases.

• Low-Mid Density NOR: Highly Constrained.
• High-Density NOR: Some Constraints.

• NOR Flash memory is anticipated to remain tight through the first half of 2023.
• Rising popularity of true wireless Bluetooth earbuds increased demand for NOR Flash memory and this is expected to continue through CY2023. Couple with 5G product introductions and we will see tight supply.
• NOR Flash Foundry partners are also seeing increased demand from non-memory products that yield higher margins and this will limit capacity expansion plans for NOR Flash.
• The invasion of Ukraine is not likely to cause material shortages, but customers need to be vigilant. 
• Shanghai lockdown delays have diminished. Remain vigilant to global Covid issues.

• Low-Mid Density NOR: Increases.
• High-Density NOR: Increases.

• EEPROM: Stable.

• EEPROM is a mature memory technology.
• There is stable demand and a supply base that continues to support the marketplace today.
• Balanced market conditions are expected to continue throughout 2023.
• Make sure to monitor lead times and give ample forecast.
• As major suppliers continue to extend lead times and have capacity constraints, look to tier-2 suppliers for support.
• Covid lockdowns have diminished. Be aware of global Covid issues.

• EEPROM: Stable.

Allocation

• Lead times remain constrained due to robust demand from multiple market segments (automotive, healthcare, 5G, IoT applications).
• Upstream supply constraints for raw materials (connectors, semiconductors die, lead frames, substrates, etc.)
• Actively diversify and be multi-sourced. Flexibility to accept various parameters such as form factors, sensitivity, and connector types is necessary.

Rapid Growth in Demand for Sensors

• Automotive electrification, healthcare, 5G, and IoT applications continue to fuel strong demand for Sensing technologies.
• Added capacity from suppliers will go to innovative products with higher ROI, resulting in older sensing technologies going end of life.
• Silicon-based sensors are bottlenecked by the ongoing worldwide shortage of semiconductor components.

Price Increasing

• Constrained supply and rising lead times continue to put strong upward pressure on prices.
• Older technology products will be pressured to compete with higher ROI products within the vendor’s product mix. 
• Consecutive quarters of price increases issued by leading semiconductor manufacturers directly raise prices on silicon-based Sensors.

• Supply constraints are still prevalent in some sectors, such as 5G equipment, but the market should be in better shape after the first half of next year. 
• Semiconductor demand is still robust in the automotive segment.
• Based on the status of various foundries’ client orders, expect the current tight supply of wafers to persist until the end of 2022.
• All products’ lead times are sitting between 46 weeks and 52 weeks with some devices as high as 78 weeks. NCNR is mostly implemented to ensure the actual demand is provided.
• Microchip, NXP, and Renesas require NCNR backlog covering all of 2023 through supply assurance programs.

• The steep declines in PC and smartphone demand is visible but do not expect an oversupply of semiconductors as demand in automotive, industrial and medical remains robust. 
• Gartner forecasts 2022 semiconductor revenue to be $639.2 billion but expects a reduction to $623.0 8 billion in 2023. Primarily impacted by weak sales of mobile phones and personal computers.
• While the consumer space will slow down, semiconductor revenue from the datacenter market will remain resilient for longer (20% growth in 2022) due to continued cloud infrastructure investment.
• The automotive segment will continue to record double-digit growth over the next 3 years as semiconductor content per vehicle will increase due to the transition to electric and autonomous vehicles. The semiconductor content per vehicle is projected to increase from $712 in 2022 to $931 in 2025.

• There is no change from most suppliers through the remainder of 2022. The current price level holds firm for most suppliers.
• ADI sent a price increase notification.
• Many suppliers report having book-to-bill ratios of around 1.2 and their backlog coverage well into 2023.
• The demand from the enterprise and datacenter sectors is still holding up.