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The Greensheet

IC

IC shortages persist, leading to a dim outlook for manufacturers

There has been little relief for manufacturers amid persistent supply chain obstacles affecting the IC market. Customers continue to report difficulty securing allocation with lead times up to 72 weeks in some instances, pushing deliveries out to 2022 or 2023 at the earliest.

Manufacturers like Xilinx, Broadcom, NXP, Marvell, and Analog Devices Inc. have struggled to rebound from the long list of challenges, like extreme weather, COVID-19 outbreaks, and other events that have led to factory closures, strained supply and price increases in the market.

 

Xilinx notifies customers of supply constraints

 Xilinx sent an official letter to customers stating it has not been able to secure additional capacity to meet customer demand due to the unprecedented obstacles impacting the semiconductor supply chain. This has led to supply constraints across its Spartan 6 family with lead times up to 72 weeks and an anticipated 20% increase in November.

 

Broadcom raises prices across various series ICs

The ongoing wafer shortage and TSMC price hikes are contributing factors in Broadcom’s price increases that went into effect in early October across various series. For example, the price of optocouplers, which transmit electrical signals between ICs, saw price increases of 10% across APDS-xxx, HFBR-xxx, AFBR-xxx, and QFBR-xxx series. In tandem, AEDB-xxx and AEDT-xxx series also increased in price by 5%. LED and smart display products have increased by 6-15%.

Lead times continue to stretch on Broadcom’s BCM and HCPL series as deliveries aren’t expected until 2023. Reportedly, some customers are paying expedition fees in hopes that product could be secured earlier.

 

NXP deliveries delayed as far out as 2023

The NXP MKxxx series, which is primarily used across the automotive sector, has consistently been affected by previous factory closures in Malaysia due to COVID-19 outbreaks. The manufacturing delays have contributed to extremely high lead times and deliveries not expected to be fulfilled until 2022-2023.

 

Marvell’s backlogged orders lead to price increase

Marvell, which makes networking chips used in data centers and vehicles, has struggled to keep pace with rising demand across all end markets. As a result, there is an expected price increase of roughly 20% in November. This will pertain to all products and current backlog orders, tacking onto current challenges as lead times stretch up to 30 weeks or more.

 

Analog Devices Inc. sees supply gaps after acquiring Maxim Integrated

Following Analog Devices Inc.’s (ADI) acquisition of Maxim Integrated, it is rumored that ADI is only giving distributors a limited timeframe to release its existing customer orders. The transition period is expected to add onto ADI’s calamities. ADI’s lead times are already up to 52-72 weeks as supply remains constrained. Price increases of 15-20% are expected in November.

STORAGE

A lack of parts and resources impact SSD builds

Intel’s mainstream products like S4510/S4610/P4510/P4610 (240/480/960GB) are reportedly in short supply and overall allocation is anticipated to be reduced by 50%. The pricing of the older series S4510 and S4610 increased by 5-10% as a result of Intel’s release of its new series S4520 and S4620.

 

Supply shortfalls from previous quarters plague Samsung in Q4

Samsung faced shortfalls in Q3 after only fulfilling 60% of its SSD demand, leading to supply issues in Q4. Its 240GB and 960 GB have faced capacity issues due to the global controller shortage. In addition, demand among end-users is shifting from Intel S4510 240GB and 480GB to Samsung PM883 due to availability and price.

Samsung was among manufacturers with facilities impacted by government-mandated shutdowns in Vietnam due to COVID-19. Its operating capacity was limited for months but is anticipated to be running at 100% in November.

 

Micron deliveries impacted by decommitments

Texas Instruments notified Micron that it is decommitting on some product lines for Q4, which will impact all October/November deliveries, which includes the 5300 series SSDs.

MEMORY


Memory module demand and pricing on a downtrend

Since memory modules are the last parts needed in a build, customers are pivoting from buffering stock and resorting to just-in-time to avoid overstock of parts they don’t need. This has resulted in the downward trend in demand in back-to-back quarters, which then reflects in the erosion of the overall pricing of memory modules.

The latest official pricing across manufacturers has decreased by around 3-5% compared to September, while open market pricing has dropped by 5-8%.

 

DDR5 memory up to 60% more expensive than DDR4

DDR5 memory kits are in the testing phase and anticipated to be 50-60% more expensive than its predecessor, DDR4. Historically, a newer module is only 30% more expensive, but the DDR5 requires more components, which is driving up the cost.

GPU - GRAPHICS CARDS

AMD and Nvidia GPUs hit 6-month high

AMD and Nvidia’s graphic card prices reached a 6-month high entering Q4 amid spikes in cryptomining activity and the ongoing global chip shortage.

AMD’s Radeon series GPUs were reportedly 83% over MSRP due to the difficulty to locate stock in the market. Reports state the RX 6800 series was among the hardest cards to find, which contribute to the spike in pricing.

Nvidia’s GeForce series GPUs were also among the server cards with higher pricing, which rose by 72% between September and October. The RTX 3090 series has been in critical shortage, which has impacted legacy models, like the RTX 20 series and GTX16xx GPUs. The shortage of GDDR5 series is also an indication of the supply woes plaguing the market.

CPU

Intel – anticipated supply gaps between new and old generations

Intel announced its 12th Gen Alder Lake CPU will be available November 4, 2021.

Supply of its i5-10500 and i7-10700 series Comet Lake Desktops is expected to see constraints in Q4 as the company ramps up production of the newer generation. In anticipation of the 12th Gen Alder Lake CPU, Intel will shift its production capacity from its older generations (9th and 10th) to the 12th.

Based on historic market trends when shifting between old and new generations, there will likely be supply gaps. Intel is already rumored to be limiting supply of older CPUs provided to distributors by 30-40% in Q4 2021.

The upcoming release of the 12th Gen Alder Lake CPU has also led Intel to decrease the retail price for certain SKUs of the 11th Gen Rocket Lake.  The adoption rate for Alder Lake is expected to be a lot higher than what we saw for Rocket Lake, as both required re-designs to the motherboards.

The 12th Gen Alder Lake Desktop CPU is Intel’s first 10NM node, putting them in line with AMD 7NM node Zen 3 CPUs.

 

AMD and Intel both ramping up production of newer server CPUs

AMD will reportedly be re-focusing its production by prioritizing Rome CPUs over Milan CPUs, shifting the ratio from 30% to 70%. This emphasizes AMD’s intent to push production of high-margin and premium model parts to grow its market share.

Similarly, Intel is transitioning priority from its older generation server CPU, Cascade Lake, to its newer generation, Cascade Lake Refresh. Demand is already outpacing supply, directly impacting lead times, which have extended in response to delayed production output in previous quarters.

FINISHED PRODUCTS

Mellanox network adaptor cards backlogged until 2022

Network Adapter Cards, which are widely used across server builds, have led to gating issues for servers, causing significant supply constraint and shipping delays.

Lead times for Mellanox’s CX series have stretched to 26-32 weeks pushing backlogged product delivery to June 2022. Official price for Q4 is not yet announced; however, suppliers intend to raise the price.

Allocation issues in the China market are leading to supply setbacks of the Mellanox HDR 200G fiber cables and Y cables, which have lead times ranging from 35 to 36 weeks.

Mellanox shortages could escalate in 2022 due to the various factory closures, production delays and workforce shortages that have impacted various Mellanox facilities globally. The existing backlog could worsen with the upcoming Chinese New Year, will limit China-factory production from the end of January through mid-February—adding to Mellanox’s existing supply chain disruptions.

 

Intel issues end-of-life notices for over 30 ethernet controller products

IC, wafer and substrate shortages have led to major manufacturing obstacles for Intel as demand continues across Ethernet controller products needed for server builds. The end-of-life notice comes in the wake of demand for Intel’s high-volume products in order to maintain and consolidate supply for delivery to customers. This notice impacts Intel’s X550-AT2, X540-AT2, X557-AT2 and X710-BM2 series controllers. These 500 and 700 series controllers are older, dating back to 2015 and production and supply lines were not prepared for the sudden uptick in demand, which has resulted in these major supply constraints and extreme lead times (deliveries not anticipated until 2023/2024). This has also driven pricing up by 5-10% of the original costs.

 

Intel monitors wi-fi modules supply with caution

The Wi-Fi 6 module AX200 supply is tight, and allocations limited. While focus on production is moved to the next AX210 series, Intel is monitoring supply allocation of AX200 cautiously, due to open market price discrepancies.

Supply is expected to be shorter in Q4 for the entire W-Fi 6 AXxx series.

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