Manufacturers suffer from the 8-inch wafer shortage
Due to the continuous increase in demand for 8-inch wafers, along with its limited supply, many manufacturers are facing severe shortages, lead times stretches and price increases.
Richtek, for instance, has reportedly been severely impacted, with lead times stretching drastically from 4-6 weeks to 26+ weeks on a wide range of semiconductors commonly used in computers and consumer end-products. NXP Semiconductors has also reported price increases on all products. Moreover, rising demand for NXP automotive applications, in addition to the wafer shortage, has caused unstable supply from the company. As a result, lead times for high-speed Controller Area Network (CAN) transceivers have stretched to six months and longer with very limited allocation.
Infineon tried to get ahead of this shortage in Q3 2019 by investing in the production of 6-inch and 8-inch wafers, mainly for the company’s production of MOSFETs. However, because 85% of its MOSFETs use the 8-inch wafer, the company is also facing shortages. The wafer shortage is only expected to worsen in Q1, especially as demand for consumer electronics remains high. In addition to CPU and GPU makers, logic IC and power management IC manufacturers, are competing for the raw materials.
Because distributor inventories are under allocation and end-customer supply is very tight, customers are relying on the open market to solve their supply issues.
Laptop makers to face supply issues as AMD shifts production
As mentioned in the previous issue of The Greensheet, limited substrate supply is affecting AMD CPU production, forcing the company to maximize its limited resources. In addition to the processors, it manufactures (the Ryzen 4000 Series, Renoir, 7NM and Ryzen 3000 Series, Picasso, 12NM), the company is supporting customized Zen 2 7NM CPUs, These CPUs are used in the Sony PlayStation 5 and Microsoft Xbox Series X, which are the hottest gaming consoles on the market.
Because gaming consoles traditionally outsell laptops, it is likely that AMD will shift production to focus on the more profitable CPU. AMD’s Ryzen 4000 Series, Renoir, already has an almost non-existent supply in the open market, leaving customers no other option but to revert to its predecessor, the Ryzen 3000 Series, Picasso. Thus, we can assume that AMD’s focus will be on its latest CPUs and on its customized CPUs for Sony and Microsoft.
There’s currently limited supply of AMD’s Ryzen 3000 Series, Picasso, 12NM mobile processors in the open market. It’s estimated that this supply could dry up in Q1 2021.
New product launches expected at Consumer Electronics Show (CES) 2021
Anticipation is growing as AMD is expected to announce its upcoming 3rd Gen EPYC server CPUs, Milan, during CES 2021. There is speculation that these CPUs will be released as early as Q2 2021.
CES 2021, which runs from January 11-14, will be held virtually, and will showcase over 1,000 next-gen products. Expected exhibitors include tech giants, such as Intel, Lenovo, LG Electronics, Mercedes-Benz and Samsung Electronics, as well as a few non-traditional tech companies.
Intel’s Ethernet controllers and connections faces limited supply
There is growing concern that the open market is getting limited supply of Intel’s ethernet controllers and connections. Lead times are increasing, and although we’re unsure what’s causing it, customers should consider taking an early position on these products before prices increase.
|Intel Ethernet 800 Series Controllers|
|Intel Ethernet 700 Series Controllers|
|Intel Ethernet 500 Series Controllers and PHYs|
|Intel Ethernet Multi-host Controller|
|Intel Gigabit Ethernet Controllers|
|Intel Gigabit Ethernet PHY Connections|
Gemini Lake and Gemini Lake Refresh – Desktop ‘J’ series in short supply
Although we are seeing some relief and support on the Gemini Lake and Gemini Lake Refresh mobile ‘N’ series, the Gemini Lake and Gemini Lake Refresh desktop ‘J’ series processors have been difficult to find in the open market. As a reminder, both the Gemini Lake and Gemini Lake Refresh desktop ‘J’ series processors are widely used in mini ITX PC and Next Unit of Computing (NUC).
Work-from-home activities have certainly increased demand for peripherals. As such, we urge customers to grab any of the Gemini Lake and Gemini Lake Refresh desktop ‘J’ series products whenever supply appears in the open market.
Products that have been heavily affected:
|Gemini Lake Refresh (Desktop J Series)|
|Pentium Silver J5040|
|Celeron Processor J4125|
|Celeron Processor J4025|
|Gemini Lake (Desktop J Series)|
|Pentium Silver J5005|
Shortages due to lead time issues at Renesas
Renesas lead times remain stretched and unstable. The company’s overall supply was mainly disrupted due to the global interruption of raw material logistics from the COVID-19 pandemic. In addition, the US-China trade war has also heightened the situation, causing allocation issues with limited capacity.
Today, Renesas is back to having its production lines fully operational, but the extended lead times are resulting in a serious supply shortage issue, especially for parts used in the IoT, PC and automotive industries.
Global Bluetooth market prepares for massive growth
As the demand for IoT continues to grow, there is no doubt that Bluetooth will play an important role in streamlining all devices in our daily lives. Bluetooth LE and Bluetooth are already integral in connecting devices, such as phones, tablets, PCs and products in the automotive market.
The major key players include Texas Instrument, Qualcomm (CSR), Cypress, ST Microelectronics, Realtek and AKM.
Distributors are reporting that demand for Cypress increased in Q4 2020, leaving an insufficient supply of the wafer to cater to the sudden spike in demand. As such, we’re expecting to see CYW2 (Bluetooth 5.1-compliant), CYW4 (Single-Chip 5G Wi-Fi with Bluetooth) and USB TYPE-C controller demand to increase by 20%.
AVX tantalum capacitors backlog result in lead time increases
After a shaky year, AVX production plants are back up and running at full capacity. Despite this, production has been unable to keep up with the backlog due to plant closures earlier in the year. As such, lead times are stretching even further.
For customers placing new orders today, there is an additional 4-week lead time stretch compared to orders placed last month. Orders for tantalum capacitors placed now are not going to see allocation until May 2021.
Price increases for MLCC automotive and tantalum capacitors
Demand for automotive capacitors has increased across the board due to projects starting up again earlier than predicted. The sudden ‘restart’ was unexpected, and manufacturers are having a hard time keeping up with the sudden demand.
Along with rising demand, suppliers are starting to notice price increases being implemented by manufacturers. MLCC pricing, for instance, has increased by approximately 3.8%, depending on the series. Tantalum capacitors, on the other hand, have experienced an even higher price increase.
Mobile production takes a hit
Demand for mobile devices, such as Chromebooks and cell phones, continues to be strong. Phone makers, including Huawei, Oppo, Vivo and iQoo, have already begun increasing their stock of components while preparing for the launch of new flagship models in Q1 2021.
In response, memory chip manufacturers have started to direct more of their mobile production resources towards eMCP and mobile DRAM products due to better returns. In doing so, they have had to reduce the production of low-power DRAM chips, which are already facing tight supply. As a result, supply issues are expected going into Q1 2021.
DRAM chip supply is tight
DDR3 DRAM chip supply is still tight as manufacturers keep shifting production toward DDR4 chips. Recently, prices for the DDR3 DRAM chip increased an additional 5%. In response to this, some customers have been increasing their stock of DDR3 and eMMC. The recent power outage at Micron’s Fab 11 plant may also impact the overall supply of DRAM chips and lead to heightened competition for availability.
GDDR5 production will diminish in 2021 as it is anticipated to go end of life soon. Prices in the open market are already high, caused by ongoing demand from data mining projects and increased demand for graphic cards.
Due to numerous recent product launches in the GPU market, especially that of the gaming industry, there are currently severe constraints on GDDR6 availability.
Memory supply disruption caused by increased EV production
Enterprise demand for memory modules has been consistent and because official supply channels continue to be steady, the market is stable. However, a potential disruption to this equilibrium looms on the horizon with the anticipation of a surge in demand from electric vehicle (EV) makers.
The Chinese EV market, specifically, accounts for more than 50% of all worldwide EV deliveries and stock, including NIO, which has been growing significantly. Tesla, the dominant global forerunner in the EV space and the first foreign-owned EV manufacturer to operate in China, is expanding its Shanghai production plant be able to roll out its first cars early next year. The growing portfolio of EV makers, as well as strong growth signals, will test automotive DRAM supply.
Nvidia and AMD face supply issues
AMD has been trailing behind Nvidia after the launches of both their next-generation GPUs. The launches of both companies were deemed another paper launch, and thus allocations were instantly sold out after the launch. This resulted in a huge backlog across retailers and scarce shipment confirmation from both GPU giants.
Regarding AMD, all cores used for the 5000 series (RX5700 XT) have been allocated to the Play Station 5, while the company’s other production capacity has focused on the new RX6000 launch. Furthermore, AMD is using its own boards for the RX6000 series and is putting a strict control on supply allocations.
Manufacturers, such as ASRock and ASUS, that use AMD chips on their cards may encounter longer lead times. The custom designs of each brand are expected to be available in Q1 2021.
Meanwhile, Nvidia is preparing for the launch of its new RTX3080Ti and RTX3050, which are expected launch in early to mid-January 2021. However, manufacturers using Nvidia chips have reported that RTX chipsets shipments have been delayed.
The 3060 TI and 3070 chips used for mining purposes are experiencing strong demand, and it is reported that demand is expected to grow even further in Q1 2021. Also, mining activities in China are driving the market price up by around 5-8% for the two models.
Finally, chipset constraints and logistics challenges have resulted in massive delays from both sides. There is no further supply expected for December, and both next-gen GPU constraints will persist as is through Q1 2021.
HDD demand rises due to holiday festivities
Overall demand for enterprise Hard Disk Drives (HDD) picked up toward the end of this quarter due to manufacturers striving to hit their annual revenue targets. The demand has been primarily focused on large capacity drives, such as 10TB and above.
Sources have shared that customers are pulling in supply to meet their increased demand, which has resulted from year-end holiday E-commerce sales.
LCD demand leads to price increases
Demand for LCD panels has remained strong. In addition, 23.8-inch panels are also on allocation with very limited stock in the market.
We’re also seeing a significant price increase on LCD panels due to the shortage of glass. Some models go as high as 70% above their original price level.
The shortage is expected to worsen because of a power outage at Nippon Electric Glass (NEG), a glass substrate supplier in Japan that makes up 10% of the global glass substrate manufacturing. According to sources, it may take the company 3-4 months to recover. LG is predicted to be hit the hardest, followed by AUO and Innolux.
Logitech hot products
Overall demand for consumer webcams and headsets continues to be strong. Though supply from Logitech has slightly improved, some models will stay on tight allocation. We’re getting pockets of stock for hot items, such as H110, H340 and H390 webcams. However, C270 and C310 are still in critical shortage in the Chinese market.