The Greensheet: June 2022

ALL

Ongoing Mandated Lockdowns in China

Another wave of COVID-19 has affected parts of China in March. In response, the government has mandated strict lockdowns. Some manufacturers have operated at limited workforce capacity, while others have completely halted operations.

Below is a list of affected manufacturers:

IC

Littelfuse Suspends All Business with Russia

Littlefuse announced it will suspend all business activities within the Russian Federation, impacting both sales of products and the supply of materials from Russia. 

It is expected that this decision will effect supply of the following products:

Renesas Lead Times and Pricing Impacted by Ongoing Supply Setbacks

Renesas has experienced multiple setbacks due to COVID-19 mandated lockdowns and earthquakes affecting its factory operations. The setbacks have caused delays and price increases – lead times extend beyond a year and the manufacturer increased prices across all series in May. Specifically, the R5F523/RF5100/R5F101 series lead-time has been extended beyond 50 weeks, while the lead-times for Intersil series CA3/DG4/ICL3/ISL12/ISL2 has been extended to 78 weeks.

Intel Notifies Customers of Price Increases from May Onward

Intel issued a price-increase notice effective through May onward across all network card series. Lead-times for network cards continue to stretch. Customers are receiving parts on a by-allocation basis, leaving them no choice but to reach out to the open market for support. The ongoing raw material shortages have also had notable effect on Intel’s production, particularly its LOTG series – the current market price remains high with no relief expected in the near future.

Extended Lead Times and Price Increases to Be Expected Across Microchip Series

Microchip allocations remain tight as the raw material shortages and TSMC’s 0.18-micron wafer decommitment affects production across the board, notably for all mobile and smart electronic industry components. Microchip also increased prices by 5-40% on some series – in general a 10% increase has been implemented, while lead times are currently sitting at more than 50 weeks. It is rumored that Microchip now requires customers to place orders one year in advance to secure product, and authorized distributors are said to only be receiving 60% of their orders.

STMicroelectronics Shifts Its Production and Shipping Approach

STMicroelectronics has reduced its shipments this quarter because of decreased production in Q1. Overall, shipments were 25-35% lower in Q2 than in Q1—further reductions are anticipated throughout Q3 by 25-50%.

STM8 series is under strict allocation with prices expected to increase by 25%. The STM32H series is also affected by STMicro’s supply chain changes with customers finding little to no availability because STMicro is moving its production focus away from STM32F 1XX series.

Geopolitical Conflict Impacts Ceramic Capacitor and MLCC Lead Times

Throughout Q2, limited MLCC supply is a concern due to the rising tensions in Eastern Europe, which is impacting raw material and inert gas pricing and availability. Nickel, copper, palladium, and neon are among notable materials necessary in chipmaking that are impacted thus far. All key MLCC materials are subject to price increases and have direct impact on the cost to produce them and on availability in the market: around 85% of MLCCs are nickel and 15% are palladium.

In anticipation of rising costs, allocations on availabilities are expected to tighten. Yageo and Kemet Tantalum and Polymer products are currently sitting at lead times of 54 weeks and increasing, while Vishay Tantalum capacitors are ordered on an 82-week lead-time. TDK and Murata currently have lead times of 26 weeks, however these lead times are also expected to increase as key material availability remains unstable due to Russia-Ukraine war.

Vishay Increases Automotive Component Prices

Vishay increased prices for all board level components by 20%. In particular, the SQ & SQJ automotive series are short, with lead time stretching beyond a year (99+ weeks). The situation has become increasingly problematic because of the ongoing COVID-19 lockdown in China at Vishay’s factory location responsible for its MOSFET manufacturing.

Vishay’s production is also affected by workforce shortages in its factories and limited supply output. This is mainly contributed by growing demand for electric vehicles, which require MOSFETs for every build. Customers have been advised to place orders well in advance to minimize the risk of longer lead times as the persisting shortages continue well into 2022.

Mellanox Among Adapter Card Manufacturers Feeling Supply Chain Pressure

Mellanox tends to be conservative in its price increases across its NIC products – typically increasing prices in smaller increments. However, major supply gaps due to capacity constraints in tandem with high demand is leading to a potential price increase by 25-30%. Despite its previous strategic price adjustment approach, insufficient support across its manufacturing lines have caught up with Mellanox’s pipeline.

As a result of the backlog, end users are seeking alternative adapter cards. Unfortunately, alternate adapter card manufacturers Intel and Broadcom are experiencing similar severe supply issues. Mellanox originally pushed its legacy MCX-4 and MCX-5 lines as a result of its constraints and its MCX-6 is not a sufficient option since its average lead time extends to 32 weeks.

Raspberry Pi Units Severely Constrained

Raspberry Pi production is affected by the ongoing disturbances in the supply chain and is seeing severe backlog across all units. This continues to impact supply allocation even as manufacturers shift priorities to commercial and industrial instead of consumer parts. In addition to its production constraints, Raspberry Pi consumers are competing with bots that scalp stock and resell at higher prices, which is leading to reassessment of supply and selling management to prevent this.

Amid all of these supply chain disturbances, the Raspberry Pi 4 model is anticipated to experience shortages until April 2023 amid constraints.

STORAGE

All Major SSD Brands Impacted by Global Inflation

Global inflation is a primary factor in the continued price increases across all SSD brands. Major SSD manufacturers Intel, Samsung and Micron are among brands implementing 5 to 13% price hikes. Ongoing IC shortages also contribute to the strain in the SSD supply chain, as builds are disrupted because there is limited support across all lines.

Memory

DIMM Prices Expected to Decrease as Vendors Reduce Inventory

Official pricing for PC DIMMs continues to drop 4-7%, with server DIMMs dipping by around 2-3%. Overall, demand is expected to soften for the next few months as vendors attempt to reduce inventory by selling off at loss.

With Newer intel and AMD CPU series (Sapphire Rapids & Genoa) set to delay the launch to Q4 instead, key parts that is compatible to these CPUs are slowly launching to the market. Vendors shared that many customers are still in NPI testing phase and should take a while with this. Lastly, we are seeing up and coming DDR5 modules pricing at least 20-30% higher than DDR4 modules. 

GPU

GPU market improving after Shanghai lockdowns disrupted shipping capacity

The GPU market is much more end-user friendly than it was this time last year. Despite the Shanghai lockdown impacting ability of GPU manufacturers to ship out of China the price for GPU continues to drop. The cryptocurrency space has greatly reduced it’s GPU consumption with price continuously going down. There has been an increase in demand from local PC DIY retailers. Overall, tier 1 GPU manufacturers have reduced prices roughly 5%.