Growth rates have slowed in the past few years for many reasons: certain applications and markets have limited growth, average selling prices have declined and everyone is waiting for the ‘next big thing.’
Growth rates have slowed in the past few years for many reasons: certain applications and markets have limited growth, average selling prices have declined and everyone is waiting for the ‘next big thing.’Integration of components into system on chip and modular solutions is increasingly common. Naturally, over the years, every industry matures and will at some point go through significant consolidation.
In fact, in 2015, we saw over $100 billion in semiconductor mergers and acquisitions, with industry experts expecting a similar value in 2016. Our industry is going through a massive change and will not look the same within a few years.
So what does that mean for the semiconductor purchasing community? It’s simple: continuity of supply, flexibility and on-time delivery have become that much more crucial. As companies merge and are acquired, they must integrate their manufacturing fabs, facilities, systems and resources, meaning delivery and cycle times are highly likely to be affected.
Continuity of supply
Future believes its deep inventory and robust bonded inventory management program will ensure the purchasing community does not feel the effects of such changes. In fact, when it comes to semiconductor components such as discretes, analog and mixed signal, sensors, logic, memory, optoelectronics and microcontrollers, Future has the inventory
on the shelf.
Today’s industry landscape also brings an array of pricing and lead time fluctuations, with lead times ranging from four to 40 weeks. Buyers have the difficult task of managing many technologies, with the goal of ensuring continuity of supply and limited inventory liability. This is why Future Electronics acts as supply chain insurance. On top of deep inventory support, Future can help purchasers identify alternate sources of supply for additional flexibility and security.
Delivery landscape
So what is today’s delivery landscape? Lead times currently fluctuate from eight to 12 weeks on average for analog, power and mixed signal ICs with certain automotive product families seeing extended deliveries. Sensors are seeing lead times anywhere between eight and 24 weeks, with stable pricing in the past six months.
When it comes to discretes, low voltage mosfets show steady lead times ranging from 10 to 14 weeks but there are some upward pricing trends in this area. High voltage mosfets, ESD, fuses, rectifiers, diodes and insulated-gate bipolar transistor lead times are also stable, ranging from eight to 16 weeks with stable pricing trends.
Deliveries in the microcontroller and microprocessor space remain stable, ranging from eight to 16 weeks. The emergence of generic cores in this space had driven resales down over the past five years, however that has stabilized in the past 12 months.
Despite the fact that the memory market is traditionally very volatile, currently we see lead times somewhat stable, with DRAM and NOR Flash being the most volatile at eight to 18 weeks.
Finally, in optoelectronics, infrared component lead times range from six to 16 weeks delivery. We also see stable pricing and delivery in the isolation component families.
Expect fluctuation
As always, deliveries fluctuate constantly and can be affected by certain industries such as the automotive and mil/aero segments. Business can also be affected by external factors such as election season, which in turn affects pricing and delivery trends.
As the industry continues to witness mergers and acquisitions, expect to see lead times and pricing impacted significantly. Future Electronics therefore remains committed to stocking turn levels such that customers need not worry about inventory arriving on time, or being stuck with excess inventory. Instead they can focus on research and development and new technologies in their application space.
Although mature, there is no doubt that the semiconductor space remains exciting. With the emergence of the internet of things, complexities will increase and customers will require additional services. Future is working at the forefront with a differentiated support model.