Market Intelligence
November 6, 2023

The Greensheet: November 2023

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The Greensheet is Fusion Worldwide's monthly market intelligence report detailing the most significant developments across the integrated circuit, central processing unit, and hardware commodity supply chains. Here are some key takeaways from our latest report: 

  • Vishay and NXP lead times are fluctuating due to interruptions to manufacturing capacity, which is causing constraints. 
  • Demand varies in the CPU market as some distributors continue to navigate EOL notices. In addition, there may be a surge in demand with China's Single's Day celebration on November 11. 
  • Memory market trends focus on price increases and how this will influence demand as manufacturers delay delivery and quotes. 

Pockets of constrained IC supply continue to impact the automotive and industrial industries. The telecom infrastructure industry has also begun to face shortages as disruptions effect supply of vital components. Meanwhile, demand from AI customers has caused variations in pricing and availability of GPUs, CPUs, and system memory components. 

Learn more about the market happenings in the full report below. 

 

Integrated Circuits

Onsemi Partners with Vanguard International Semiconductor Corp. 

Tower Semiconductor has notified onsemi that they will no longer supply the company's wafers after Q2 2024. Due to this event, onsemi qualified another wafer foundry, Vanguard International Semiconductor Corp. (VIS), to secure continuity of supply. 

Onsemi is already transferring production to its new partner and has marked several products as soon to be discontinued. The company has also noted that automotive components, in particular, will receive new part numbers to aid in the transition, as this strategy improves compatibility with new equipment, ensures quality control and traceability, and better organization for inventory management. The last order date for components with wafers from Tower Fab 1 will be November 20th, 2023. 

As onsemi continues to work through the transition to VIS, distributors are offering limited bridge inventory, and all orders will be subject to NCNR terms. Customers with long-term supply agreements will receive two years of the contracted volume, also under NCNR terms. Reports state that onsemi will not be able take new orders for certain components beyond November 20th, as it will take time for VIS to support onsemi's needs fully. In the event of a product change notification, onsemi will ship all orders received before November 20th. Customers will need to find alternative sources following this date. 

Vishay Lead Times Extend for CRCW Series 

Lead times for Vishay's CRCW series of high-power thick film resistors were between 18 to 20 weeks last quarter but have quickly risen to over 70 weeks. The automotive, industrial, and telecom infrastructure industries are feeling the effect of these delays, as they use these resistors for power conversion, motor drive, and battery management applications. 

Distributors are carefully monitoring market intelligence channels for updates. While there have been no official reports regarding significant impacts on production, manufacturers have alternative plans to transfer capacity to other regional factories if additional support is necessary. Prices are subject to change without prior notice as the company works to identify any areas where manufacturing is at risk. 

NXP Lead Times Stretch up to 170 Weeks for ARM MCU Series 

Long lead times impact certain MPNs of NXP's S32K1 series of ARM MCUs. The shortest lead times are 52 weeks, while the more constrained series stretches to 170 weeks. This comes after a notable increase in market prices for the FS32K144 and FS32K146, which were experiencing delayed deliveries and limited allocation from the manufacturer. 

Additionally, NXP sent end customers an official price increase notice for the MCIMX6 series, which is within the range of 10% - 20%. Lead times for this series vary, although some MPNs with consumer applications range between 37 to 50 weeks. MPNs with industrial applications have reported up to 57 weeks lead times. 

 

Central Processing Units

Manufacturers Ready Supply for China Shopping Festival 

E-commerce platforms and shoppers prepare for China's yearly Double 11, or Single's Day, shopping festival. This global commercial event, which takes place on November 11th, has authorized distributors planning for a surge in sales for Intel's 12th Gen Alder Lake and 13th Gen Raptor Lake for both Gaming Desktop and Notebook CPUs. 

Retailers are expecting demand to focus on the "K" and "KF" suffixes for Desktop CPUs and the "P" and "H" suffixes for Notebook CPUs. Apart from Intel, Tier 1 gaming customers in China are also expediting shipment for AMD Notebook CPUs in anticipation of the holiday. 

EOL Notices Cause Fluctuations In Pricing and Availability for the CPU Market 

Overall activity for the EOL 11th Gen Tiger Lake Mobile CPU has steadily declined as speculation indicates that Intel may extend the last shipment date. This possibility has led to a drop in open market demand as customers hesitate to pay premium costs before their allocation arrives. 

However, open market pricing is declining following the low activity over the past few weeks, so customers may turn to alternative sources if pricing matches the official allocation costs. 

Alternatively, activity is increasing for small-core CPUs, mainly the J series CPUs. Intel has strategically prioritized certain authorized distributors with allocation for specific SKUs, indicating that a price adjustment may be on the horizon. This development comes as customers feel pressure from the EOL notice for the Processor J4125. This has caused demand to fluctuate, and Intel distributors are now struggling with unstable inventory as they work to balance supply with new pockets of demand. 

On the AMD side of the market, the Ryzen Threadripper Pro 7000 series is still experiencing limited availability. Pricing and supply should be more apparent in the next few months as forecasts for year-end and 2024 take shape, increasing visibility. 

Demand Slump Continues for Server CPUs

Spot demand and transactions in the server CPU market mainly focus on cost savings opportunities. While a few AMD distributors have been able to return inventory for the Rome and Milan series, vendors are still managing heightened inventories for both Intel and AMD products. Distributors may begin accepting returns of the Genoa series if demand stays low. 

Intel distributors are reacting to market conditions and remain hesitant to submit forecasts. Demand is deficient for the older series of Cascade Lake, Cascade Lake Refresh, and Ice Lake as they try to mitigate the risk of inflated inventory. Additionally, most offers in the 4th Gen Sapphire Rapids market are based on smaller quantities for vendors still willing to stock up. Prices remain soft and vary depending on the source. 

 

Hardware

DRAM and NAND Prices Trend Upwards At the Start of Q4 

Industry experts noted a 10% to 15% price increase in the DRAM and NAND market in October. At the same time, manufacturers like Solidigm have continued to scale back manufacturing for NAND but noted that demand is rising for DRAM. 

Micron reportedly delayed delivery of DRAM orders as the company planned to implement cost adjustments. The company foresees a price hike ranging from 10% to 15%. 

Price Increases Hit DDR3, DDR4, and DDR5 Amidst Varied Market Conditions 

Stock allocation for memory modules was on hold during Golden Week in October as manufacturers adjusted pricing. As companies slowly returned to work, negotiations with Tier 1 customers further delayed official announcements, which caused a slight build-up in orders. 

Since the conclusion of the holiday, pricing has increased by 5% to 12% across DDR4 and DDR5, the two most in-demand products, thanks to AI customers. The 64GB DDR4 configuration saw the most significant price increase. High-capacity DDR5 module allocation and supply remain unstable, with vendors sharing that availability has been insufficient, causing the order backlog to stretch further. 

Alternatively, DDR3 demand has not seen much variation in demand, but lead times have stretched from 4 to 12 weeks after the manufacturer reduced production. According to Samsung distributors, manufacturers made the cut anticipating October price adjustments. 

Open market pricing remains attractive as customers seek alternative sources to secure buffer stock. However, this is subject to change depending on how demand influences trends in Q4. 

Manufacturers Hold Availability Pending Cost Adjustments as SSD Demand Rises 

In preparation for the Golden Week festivities and closures from October 1-7, most manufacturers halted quoting and shipments of orders two weeks prior to the holiday. Vendors shared that SSD allocation was cut by 30% or 40% for many customers, which left them in a holding pattern as official notice of the price increase is still pending. 

Speculation indicates that SSD will see prices increase by 20% on average throughout Q4. For enterprise SSDs, reports indicate that pricing will rise by another 5% to 10%. This situation has impacted the market, as availability is limited due to manufacturers continuing to hold onto supply until new approved pricing is released. 

As customers wait for their sources to release supply, there has been an uptick in panic buys as inquiries have increased across all SSD products. High-capacity models are the most in demand, and vendors have shared that supply is already limited due to the sudden upside in interest. 

NVIDIA Lead Times Continue to Extend Alongside Supply Constraints 

Supply remains limited for NVIDIA's Tesla series. The constraints have pushed AI and deep learning customers to alternative GPUs, which has resulted in a spike in demand for the A10, A30, and A40. Pricing has followed suit due to the unexpected uptrend, with a concentrated increase in Asian markets thanks to heightened demand. Lead times have also expanded for mainstream workstation series as demand has spiked within multiple industries. 

Furthermore, RTX 4090 supply has been drastically reduced due to the lower allocation of GPU chipsets. This development has affected overall GPU allocation and caused lead times to extend. Supply is volatile for the RTX 4090 single blower edition series, and delivery time frames from all GPU sourcing partners will be subject to change until further notice. 

Alternatively, shipment dates for the new model L40s have been confirmed and will arrive between October and November. This GPU has improved performance compared to NVIDIA's Tesla A800, so demand will likely decline for older series as customers upgrade to the newer model. Vendors may release more of their A800 inventory to prevent further price erosion. 

The Wait is Over, Raspberry Pi 5 Hits the Market 

Details about Raspberry Pi's latest product, the Raspberry Pi 5, were officially announced at the beginning of October. Despite speculation that the launch might be delayed until early next year, the company stated that the Pi 5 would be available at the end of October 2023. 

There is no official date yet, but pre-order listings have begun. The Pi 5 will be more expensive than its predecessor, but the tradeoff for a higher price tag is enhanced performance and improved specs. The Raspberry Pi 5 will be 2.5 times faster than the Pi 4, with upgraded CPU, RAM, and connectivity. 

While many customers may prefer the Pi 5 because of these developments, demand for the older model may hold strong as it remains a reliable and less costly option. 

Stay ahead of shortages and electronic component supply chain changes by signing up for Fusion’s biweekly report, the Industry Insider, or reach out to a representative today.    

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