March 25, 2021

The Greensheet: February 2021

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Intel to release incompatible CPUs 

According to Intel’s support web page, its upcoming 11th Gen Rocket Lake desktop CPUs, consisting of Core i5, i7 and i9 SKUs, will not be compatible with the company’s entry level B460 and H410 motherboard chipsetsThe B460 and H410 chipsets are only compatible with Intel’s 11th Gen Comet Lake Refresh CPUs, which include Celeron, Pentium and Core i3 products. 

This is a strategic move by Intel as its mid- to high-tier Core i5, i7 and i9 are more expensive than its previous products. The compatibility of these processors with Intel’s upcoming 500 series desktop chipset allows for the seamless adoption of its 11th Gen Rocket CPUs. 

As predicted, production of B460 and H410 chipsets will most likely fall off of Intel’s priority list. Hence, we urge customers to start looking at open market lead time availability offers on these constrained chipsets, and book them as soon as possible.  

Paving the way for AMD’s upcoming EPYC Milan CPUs 

We are hearing that distributors and vendors are reducing their inventory of AMD’s EPYC Rome series server CPUs, making room for its upcoming successor, the EPYC Milan server CPUsThis could lead to less immediate stock availability of the Rome series in the open market, which is also expected to rise in pricing.   

We suggest customers evaluate their Rome series server CPU usage and demand in deciding how much of this product is needed. Buy now and take any lead time booking offers as soon as possible to avoid extended booking lead times and price increases 

TSMC shortages impact AMD’s CPUs 

TSMC is under pressure to meet demand for many industriesThe gaming industry is one such example. Sales for Sony and Microsoft are being impacted by the limited supply of AMD’s customized chips, which are used in the production of PS5 and Xbox Series X. AMD’s production is dependent on TSMC’s production allocation priority, leaving these three companies at its mercy. 

Increased competition for these chips, in addition to the substrate shortage, is expected to cause severe shortage across all of AMD’s CPU series going forward. As a result, lead times for these products will only keep extending.  

On the flip side, Intel will benefit if AMD keeps falling short on their delivery and commitment to customers. 

Bitcoin growth adds additional pressure 

Between January and February 2021, the value of Bitcoin rose from $30K+ to $50K+. With AMD’s server CPUs being a popular choice for Bitcoin Miners, manufacturers are competing for allocation. Because of the ongoing shortage of AMD server CPUs, current supply is too limited to meet overwhelming demand.



Customers warned of coming price increases across many product groups 

There is growing demand for ICs related to five key areas: energy efficiency, mobility, security, IoT (internet of things) and server/cloud serviceswhich is putting pressure on supply. Throughout early 2021, various passive and active electrical components manufacturers notified their customers of pending price increases on products like MOSFETs and diodes 

Reasons for the increasesare limited foundry capacity and the increasing cost of raw materials, including critical chemicals and consumables needed for chip fabrication. These contributors have extended lead times up to 6 months and, in some instances, prices have increased 5-15%.  

Growing automotive industry will create more demand 

The current automotive chip shortage is largely due to the poor anticipation of the vehicle boom. The increasing prevalence of electronics in both gas-powered and electric vehicles has led to the use of semiconductors in a wide array of applications, from power steering and brake sensors to entertainment systems and parking assistance cameras. 

The situation is so dire that it prompted the US government to pressure Taiwanese semiconductor producers, such as TSMC and MediaTek, to resolve the chip crunch for American carmakers that have been hit hard. 

The expected growth of the automotive industry alone will create further demand. This includes the rising adoption of power ICs and multiplexed bus systems in electric vehicles (EVs), as well as the rollout of smart cities and IoTNXP Semiconductors, for instance, announced the next phase in its smart city collaboration with the city of Columbus, Ohio in which it will contribute critical technologies for testing purposes.  

Because of the variety of applications for power MOSFETs in EVs and hybrid vehicles, many semiconductor manufacturers are starting to develop automotive-specific products.  

Due to simultaneous growth in many industries, semiconductor foundries have had to reallocate their production capacity to address a multitude of products facing shortages  further exacerbating automotive chip shortagesBuyers expect the situation to get worse before it gets better.  

Unstable market conditions cause Murata’s lead times to stretch 

Lead times for MLCCs have stretched from 6-8 weeks up to 16-20 weeks from amplified demand and the shortage of raw materials. As suchlead times for automotive MLCCs jumped to 30+ weeks – with some automotive MLCCs being so constrained there’s no lead time indication at all.  

Murata, which owns more than 34% of market share, is controlling the supply of certain MLCCs. These parts have no lead times indicated by Murata and are on tight allocation.  

Furthermore, Murata has notified European distributors that the EMEA market will not be supplied with a large volume MLCCs, due the massive 5G demand  in Asia. Distributors have shared that only partial shipments will be delivered until current market conditions improve.  

NXP works to improve supply of automotive chips 

To support the sharp increase of automotive demand, NXP has converted its industrial production lines to focus on automotive parts with hopes of improving supply. However, in the short term, industrial application MCUs are facing extended lead times on certain series. The most affected are MKExxxxMKLxxxxLPCxxx. 

In other news, NXP is introducing a new series, FSxxx, which will slowly replace the S9, SPCxx and MPCxx series. It is predicted that all automotive chips will remain short until at least early Q2, while rising prices and extended lead times will continue until at least mid-2021. 

Renesas to increase automotive in-house production 

Until 2020, Renesas Electronics Corp. reduced its in-house production of automotive products, which have relatively low margins compared to PCs and smartphones. But now, Renesas is increasing its in-house production of automotive semiconductors to follow up all contract orders. The company is planning on investing more than 15 billion JYP into facilities in Q1 2021.  

Additionally, Renesas halted operations at its Ibaraki factory on Feb. 13, after a magnitude 7.3 earthquake. Despite recovering power, the company decided to halt production for 2 days to inspect the building and its equipment. 

Manufacturers focus on smaller case size MLCCs 

As the COVID-19 pandemic becomes the new normal and we continue to work from home, demand for products like mobile devices or gaming consoles remain high. Therefore, there is a shortage of small MLCC case sizes (0402, 0603, 0805) in the market and for capacitances above 1uF of MLCC.  

Smaller case sizes allow for a better profit, so the market is seeing manufacturers prioritize the production of these rather than larger case sizes in hopes of keeping up with demand increases.  

Texas Instruments will produce high voltage chips 

In its next generation series, Texas Instruments will be producing high voltage power management chipsThese gallium nitrides (GaNand field-effect transistors (FETs) have a higher voltage of 650-V and 600-V to cater to advanced automotive and industrial applications. It has been reported that the new series of GaN and FETs will deliver twice the power density to achieve 99% efficiency and will reduce the size of power magnetics compared to its current model. 

Currently, there is a 26-week lead time to produce finished chips at Texas Instruments. However, it is believed that the current supply shortage will ease in the coming months and supply will begin to slowly meet demand.  

AVX’s Penang plant shut down 

We have heard that AVX’s Penang production plant was shut down from Feb. 110. While the cause of the shutdown has not been officially announced, there are rumors the plant was shut down to be fully disinfected after the appearance of COVID cases.  

This production plant is one of the largest and most advanced MLCC plants under AVX, specializing in automotive MLCCsIts  monthly production capacity is in the billions.  

Intel faces rising Ethernet Controller demand 

As mentioned in Decemberthere is limited supply of Intel’s Ethernet Controllers in the open market, which is caused by capacity and planning issues. The shortage started when demand increased because customers switched from Realtek’s Ethernet Controller – which were short at the time. 

Moreover, Intel has announced the EOL on its 82583V Gigabit Ethernet Controller (WG82583V) to make way for its new Ethernet Controller I211-AT (WGI211AT). This adds more pressure on supply. We are hearing that the shortage of Intel’s Ethernet Controller I211-AT will last until Q3 2021.



Enterprise storage demand is on the rise 

Overall, enterprise storage demand has started to pick up compared to last quarter. Demand for low-capacity enterprise storage (4TB and below), specifically, has spiked. Production is not keeping up with demand as manufacturers allocate production capacity to highcapacity models, which have a higher profit margin. Lead times for low-capacity models have been stretched from 4 to 8 weeks. 

Some insiders have noted that there may be supply issues for controller ICs, which could affect SSD productionMoreover, with Intel selling its SSD business to Hynix and getting out of the segment entirely, Samsung appears primed to increase its market share. We are already seeing this reflected in the market as Samsung’s SSDs have seen a rise in adoption rate.



SSDs expected to experience drastic growth

The global SSD market is predicted to increase at a quick pace within the next 4 years due to its low cost of operation compared to HDD. Eventually, this cost is expected to decrease, becoming cheaper than HDDs. However, some manufacturers have shared concerns over the stability of the raw material supply chain.

While there are no current tangible direct impacts, it is prudent to stay alert as this segment may also become susceptible to these ongoing issues.



LCD panels limited by glass substrate shortage 

The shortage of raw materials, specifically glass substrate, continues as demand from medical instrument manufacturers and pharmaceutical testing device makers remains high. In early February, AGC Fine Techno Korea, a glass substrate manufacturer that mainly supplies Chinese manufacturers, suffered an explosion at its manufacturing plant in Gumi, South Korea. While it only accounts for about 1% of the global supply, it is yet another uncertainty that will likely keep glass panel prices high. 

The supply of the most common 14” and 15.6” panels remains the most difficult to secure with production unable to catch up to demand. Larger sized panels are typically more profitable for glass substrate manufacturers, so it is likely that manufacturers will reallocate production capacity from smallersized panels to alleviate 14” and 15.6” panel demand. This could cause shortages for smaller sizes, such as 11.6” screens commonly used in Chromebooks.  

Other size ranges from like 17.3” to 23.8” appear to be relatively stable in the market right now. However, this could quickly change from general uncertainty in the glass substrate market. 

Continued demand for peripheral goods 

The supply of Logitech cameras has stabilized in all regions after volatile 2020, causing continuous supply issues. Insiders suspect this could be due to reduced production in preparing for the launch of Logitech’s new models announced in January (C505, CC4500E, CC5500E). 

Further WiFi card constraints 

Since January, demand for Intel’s WiFi cards remain on an uptrend, particularly for the AX200 and AX201. Customers have been looking to buffer stock from a lack of improvement in supply.



GPU pricing skyrockets from shortages 

The supply of GPUs continues to fall short of heightened demand. Major foundries, such as TSMC and Samsung, simply cannot keep up with the high demand from all sectors, especially from consumer electronics and auto manufacturers. 

With 8nm wafers needed for a plethora of components, including the CMOS, power supply controller, MCU, RF component, MEMS, etc., GPU makers are having to compete for this raw material. This is in addition to preexisting supply issues with ABF substrates and GDDR6 DRAM, also used in GPUs. 

As a result, open market pricing has been consistently rising. With yet another spike at the end of the Lunar New Year holidays, the price of GPUs are almost triple that of official distributor pricing.  

Nvidia reintroduces certain RTX 2000 models 

Despite supply and production issues, Nvidia announced its new GPU model, the RTX 3060 12GB, at CES 2021 that will be available to the market at the end of February. Regardless, Samsung is still struggling to provide Nvidia with enough 8nm wafer supply for Nvidia’s new RTX 3000 Ampere series. 

Prior to the launch of the Ampere series, Nvidia discontinued the RTX 2000 Turing series and allocated production capacity to its new products. However, due to shortages affecting the production of the RTX 3000Nvidia has reintroduced some of its RTX 2000 models to meet GPU market demand, and cope with the scarcity of supply for all models in general.  

Immense cryptocurrency demand leads to Nvidia’s dedicated product line 

The recent jump in demand from cryptocurrency miners has been so strong that miners have received direct support from Nvidia and AMD for bulk purchases of GPUs, according to industry insidersWorking directly with endcustomers is a deviation from their traditional distribution strategy of working closely with key manufacturing partners.  

With such high levels of cryptocurrency mining activity, it is expected that much of the available RTX 3060 supply will not satiate existing and pent-up demand. In response, Nvidia announced its new dedicated GPU product line – Nvidia CMP (Cryptocurrency Mining Processor) – for the sector.  

The success of Nvidia’s new CMP product line is dependent on the company’s ability to obtain 8nm wafers.

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