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Showing posts for May 2017

17 May 2017

Electronic Component Lead Time News (May 2017)

Lead times have generally remained stable throughout April and into May, though there has been fluctuation within individual product categories – noticeably DSP and microprocessors.

However, the biggest news in relation to the availability of electronic components comes from the ultra-competitive memory sector. Over the past six months, the cost of memory has risen as supply has become constrained. And to make matters worse, all of Toshiba’s memory products are now available only through allocation, as are some lines of Micron DDR3 memory. 

In short

  • Micron and Toshiba products on allocation
  • Memory prices stabilise but still remain high
  • Lead times for microcontrollers rise across the board
  • ON Semiconductor and ST lead time rise


The availability, price and lead times for the majority of analog product have remained stable through April.

Besides a couple of delivery constraints being reported for ST families (that have resulted in a slight lead time increase), the major worry in this sector is the availability of ON Semiconductor products.

According to our latest information, lead times for analog components have increased across the board, to a maximum of 26 weeks.


Although pricing in this sector hasn’t seen much change, lingering concerns about manufacturing could see costs rise in the near future.

Due to capacity constraints, the lead times for a handful of products have gone up in the past month, with ST lines being most affected by these ongoing problems.

We have also heard that the Nexperia’s LFPAK is on allocation.


Toshiba’s woes have made headlines across the globe and with the company’s future in doubt, the market has responded accordingly.

All Toshiba’s memory products are now only available on allocation, accompanied with a minimum lead time of three months. Micron has also placed its popular DDR3 and DDR2 lines on allocation, whilst the manufacturer’s NAND flash products now come with a 16 week lead time.


Although lead times have, generally, remained constant, there is a lot of variation in the availability of parts. For example, lead times for Samsung products come with a 6-8 week lead time whilst comparable Broadcom parts are available after a 10-14 week wait.

The biggest shift in the opto market comes with Osram manufactured parts. Lead times have risen to a maximum of 20 weeks, whilst many product families have been placed on allocation.

DSP & Microcontrollers

We have seen lead times rise across the board, with only Texas Instruments able to keep their availability at a stable level.

This increase continues a recent trend that has seen lead times gradually get longer throughout this calendar year. Lead times of 20+ weeks are becoming common.


The market for logic products has remained stable, with only minor fluctuations in price and availability.

Unexpected lead time increases can play havoc with your purchasing strategies and production runs. Make sure that you’re guarded against fluctuations in price and availability by working with Cyclops Electronics.

15 May 2017

A Return to Allocation?

With lead times expanding and major OEMs struggling to secure stock, industry sources are suggesting that the electronics industry is about to see a widespread return of allocation. Cyclops Electronics examines the issue.

Is Apple going to release a brand-new smartphone for its tenth anniversary later this year? That is what many industry analysts are debating at the moment. Although there has been plenty of column inches dedicated to the topic of Apple’s latest phone, it is probably safe to say that nobody - except Tim Cook and a couple of other high-ranking officials (perhaps) – would be able to provide a definitive answer.

However, despite there being no concrete evidence, either way, many within the media have been speculating that any imminent product launch from Apple could be delayed due to a global shortage of electronic components. If Apple is struggling, how are other OEMs going to secure the parts that they need for production runs?

And then there is talk that leading semiconductor manufacturers could be allocating stock on a widespread basis in the coming months and then add the usual fears associated with consolidation. It all comes together to paint a potentially worrying picture.

What do we know?

Well, for a start, lead times for certain types of components have risen.

During the past couple of months, the availability of ceramic capacitors through certain distribution channels has increased from sixteen to thirty weeks. The reason for this is that there has been a spike in demand from Asian manufacturers that has left little stock on the global markets.

People searching for memory from franchised sources are finding it harder and harder to secure stock. Due to strong growth in the smartphone sector and the release of a new line of premium Samsung handsets, many memory manufacturers have put their products on allocation. According to our latest information, all Toshiba memory products are now on allocation, as are Micron’s popular DDR3 lines.

Finally, we have heard reports that lead times for many ON Semiconductor and Analog Devices lines are increasing, to the point where allocation is a real possibility.

Why is this happening?

To put it simply: In many cases, supply is outstripping demand.

In a report released at the beginning of this month, an analyst for Deutsche Bank wrote: “Several supply chain reports have suggested that key component shortages…could delay the release of a high-end iPhone 8 device this [autumn].” This report supports a previous claim by KGI Securities analyst Ming-Chi Kuo who reported that the new device will face “severe supply shortages”. Bloomberg has also published a story earlier this year predicting that “supply constraints” will delay any release.

Of course, many component and semiconductor manufacturers will be prioritising their tier 1 OEMs. But even with global technological juggernauts such as Apple finding it hard to procure the quantities of stock needed, there is a massive knock-on effect across the entire supply chain.

Apple’s supposed woes, whilst making a lot of headlines in recent months, are part of a wider trend.

There has been a noticeable shortage of NAND flash products for over six months now. Worldwide production capabilities of NAND flash is somewhat limited, due to many manufacturers (a list that includes Samsung, Micron and Toshiba) switching from 2D to 3D NAND. This sluggish transition has inadvertently led manufacturers to concentrate their efforts on supplying their most prominent and profitable customers and market sectors.

For the majority of OEMs, this has resulted in an increase in price.

According to the industry research firm IC Insights, the average selling price of NAND flash is 40% higher today than it was at this point last year.

It is a similar story when it comes to DRAM memory products, which cost around 45% more than they did twelve months ago.

This inability to meet OEM demand is not just consigned to those manufacturers who produce NAND flash and other forms of memory.

Many semiconductor manufacturers plan their production runs on historical trends and future projections, building a percentage in to cope with fluctuations. However, there is a trend for customers to place high-volume orders through different sources when market prices start to rise in a bid to get the best deal. This impacts production plans, forcing lead times up and increasing the threat of allocated shipments and back orders.

Finally, the raft of mergers and acquisitions has played havoc with market trends. Consolidation is rarely positive for the OEM purchaser as the possibility of obsolescence increases whilst the number of potential suppliers diminishes.

As Adam Fletcher, chair of the Electronic Component Supply Network wrote on the issue recently: “legitimate concerns about the medium and long-term product availability, pricing, possible product rationalisation etc., causes considerable anxiety”.

In high-profile markets and industry sectors, it is natural for companies to move quickly and secure stock early to protect themselves against any change in production patterns. However, this leaves those who don’t act immediately wrong-footed and battling with inflated costs, amongst other headaches.

Another consequence of consolidation is that similar product lines are merged. This can cause a bottleneck in supply chains as demand is spread across a small number of franchised sources. A result of this is that semiconductor manufacturers can implement allocations until production levels can be increased and buffer stock successfully built up.

Whilst we are not at the point of widespread allocation due, we have seen that lead times for ON Semiconductor/Fairchild and NXP/Freescale lines have followed an upward trend throughout this calendar year.

How can Cyclops Electronics secure your supply chain?

With the prospect of allocation likely, although not officially confirmed, many OEMs will be looking at contingency plans to secure the parts that they need for upcoming production runs.

Thanks to our global procurement network, we are able to lock down large quantities of available stock – no matter where those components are located.

We offer a dedicated stockholding service for all our customers who opt to schedule their orders and deliveries. Based on your forecasts, our purchasing team will locate and buy the stock you’ll need on an annual basis. This not only secures your supply chain but because we buy the entire quantity, we can also offer you cost savings and other efficiencies that will greatly improve the bottom line of your business.

Then, when you need the stock, we ship it out to you. No more worrying about lead times and fluctuations in price: We give you the stock you need, when you need it at a fixed price. It’s that simple.

With many of the world’s largest OEMs operating on a near year-round production cycle, it can be difficult to be reactive when problems arise. If, for example, you need a small quantity to complete an additional manufacturing run, then your one-off request through franchised channels could see you left with a lead time of three months or above.

Again, this is where we come into our own. By pouring through our list of trusted suppliers from around the world, we can find you the parts you need – no matter if they’re on a three, thirteen or thirty-week lead time.

Don’t play the waiting game. Come to Cyclops Electronics and see how one of the world’s leading independent stocking distributors can keep your production lines running in a cost-effective manner, even with the threat of allocation and inflated prices looming large.

05 May 2017

Samsung could pass Intel in Chip Sales

Due to an increase in the price of memory chips, Samsung looks set to overtake Intel and become the world’s biggest supplier of semiconductors.

If industry predictions are correct, Samsung would be the first company to successfully supplant Intel as the world’s biggest semiconductor vendor for twenty-four years.

This feat is all the more impressive given that in Q1 2016, Intel’s sales were 40 percent up on those of Samsung.

Samsung’s big swing in sales is mainly down to the substantial rise of Dynamic Random Access Memory (DRAM) and NAND flash products in recent months. According to the industry research firm IC Insights, the average selling price of DRAM is 45 percent higher today than it was at this time last year, whilst the cost of NAND flash has gone up by 40 percent over the same period.

This rise is due, in part, to an industry-wide shortage of memory products, which as well as forcing prices upwards, has seen lead times increase.

If the cost of memory remains stable – or indeed rises – throughout the rest of the year, then Samsung will likely ride and this wave and overtake Intel. Some estimates put the South Korean firm’s yearly sales figures in the semiconductor sector to top $60 billion.

Intel has been the world’s biggest semiconductor supplier (in terms of revenue) since 1993 when the American company introduced its revolutionary x486 and Pentium-series processors.

This news comes at the same time as the Semiconductor Industry Association announced that IC sales for March 2017 were nearly twenty percent higher than in March 2016.

“Global semiconductor sales saw solid sales growth in March, increasing sharply compared to last year and more modestly compared to last month,” John Neuffer said.

The SEMI CEO continued: “Global sales are up 18% compared to last year, the largest increase since October 2010, with all major regional markets posting double-digit year-to-year growth. All major semiconductor product categories also experienced year-to-year growth, with memory products continuing to lead the way.”

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