Market Intelligence
October 2, 2023

The Greensheet: October 2023

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The Greensheet is Fusion Worldwide's monthly report on trends that impact the open market supply chain. Our latest report details the changes in supply and demand influencing the integrated circuit, CPU, memory, GPU, and networking product industries. 

  • In the IC market, industrial, EV, and solar power demand has begun to wane and has resulted in changes to supply levels. Meanwhile, automotive demand stays strong, and lead times remain extended. 
  • Across the CPU segment, demand outpaces availability, causing unpredictable delivery timeframes for certain medium core count MPNs and entry-level server and workstation series. 
  • Storage market demand continues its recovery as lead times and pricing increase for HDDs and SSDs. 

IC manufacturers start to see inventory levels rise as some industries experience a dip in demand, while automotive components cannot shake constraints. Activity in the PC and server market is still slow and may not recover until the end of the year. Meanwhile, the storage market is seeing a resurgence in demand, and the networking product constraints generate intense competition as shortages persist. 

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

 

Integrated Circuits

IC Lead Times Average Between 28 to 30 Weeks, Depending on the Industry  

The typical lead times for most integrated circuits are approximately 28 to 30 weeks. There is the potential for shorter lead times for parts on suppliers' high-runner lists, but this is case-by-case and depends on overall demand. In addition, the offered lead times may not necessarily result in lower prices compared to the vendor's stock, primarily because of cost increases incurred by manufacturers over the past few years.  

Most manufacturers are prioritizing their automotive customers due to their higher profit margins. Other industries, especially consumer electronics, demand remains soft. Consequently, parts with lower margins often have longer lead times, typically 45 weeks, and delivery schedules are experiencing frequent delays.  

Fluctuating Demand for Bluetooth Components Takes Realtek By Surprise  

Specific Realtek components for over-the-top and controller applications are seeing orders increase, particularly from customers in Korea and Japan. Since last year, many local suppliers holding excess could sell off inventory at a lower cost. However, pricing has since returned to normal levels.   

While demand has varied, most is concentrated on Realtek series 8761BTV, 8762CKF, 8762CMF, and 8762DK. The uptick in order volume was almost double the forecasted demand that Realtek had prepared for, so lead times may stretch. Prior to this, the company's lead times were between 7 to 12 weeks. 

Broadcom Manages Excess Supply While STM Struggles With Allocation Constraints  

Broadcom claimed that excess inventory was not a significant concern in August as they stated they were still shipping to actual end demand. However, lower market demand from customers in the industrial, electric vehicle, and solar power panel industries is causing elevated supply levels.   

AI is still one of the hottest market segments and is causing pricing for select Broadcom series to increase. Versatile switches that can be configured for various applications are the main focus for AI customers, with growing demand for the PEX89104 and PEX89144.  

Alternatively, STMicroelectronics demand has stayed steady and continues to climb. The order volume for the VN series of automotive MPNs shows no signs of slowing, and demand consistently trends upwards. Supply has yet to meet customers' needs in this industry, which has led to allocation constraints for E-Lxxxx and Lxxxx series motor drivers. Lead times have stretched to 34 weeks, and market stock prices for these components are also surging. 

 

Central Processing Units

PC Demand Landscape Remains Mixed as Rumored Product Launch Dates Approach 

PC market activity has increased recently, with demand focused on the Intel 10th Gen Comet Lake series, particularly the core i3 and i5. The uptick in interest is the result of reduced availability as Intel shifts production capacity to support the company’s new generation of CPUs, the Raptor Lake Refresh. This product, well suited for consumer and enterprise applications, should launch within Q4. 

Alternatively, overall open market activity for the 12th Gen Alder Lake and Raptor Lake are still considered low. Manufacturers have begun to voice concerns surrounding inventory levels as supply rapidly outpaces demand. 

Intel Instates Bundle Deals for Authorized Distributors Amidst Fluctuating Demand 

Authorized distributors are reportedly receiving desktop bundle deals for particular Intel series. For every allocation of 10th Comet Lake and 11th Gen Rocket Lake CPU, distributors must include an order for 12th Gen Alder Lake CPU.  

The items with the most demand are the 10th Gen Comet Lake i3-10100, i5-10400, and i5-10500. However, customers are reluctant to pay these parts' high prices despite the limited supply. Apart from the activity focused on large-core CPUs, there has also been an uptick in interest in Intel's small-core CPUs, mainly the Gemini Lake Refresh J series. 

Open market pricing is dropping for the 11th Gen Tiger Lake mobile CPU. This CPU went EOL in June, but demand and transactions have slowed recently. Several isolated pockets of supply were released as the quarter end approached, but there was only minimal spot demand. 

Server Market Activity to Stay Low Throughout Q4 Outside of Spot Demand 

Server CPU demand is still on the soft side on a general basis, and vendors foresee this situation persisting until at least the end of Q4. However, while open market activity is low, there have been areas of spot demand as customers seek out the best cost savings opportunities.  

AMD's Milan and Genoa series popularity has been consistent. Meanwhile, Intel is reportedly experiencing an imbalance with supply and demand of certain medium core count MPNs and entry-level server and workstation CPUs. These constraints are mainly impacting the Saphire Rapids 64XX, as well as the E-2378G and E-2388G. Delivery lead times remain uncertain for most orders. 

 

Hardware

HDD Lead Times and SSD Pricing On the Rise As Storage Market Recovery Continues 

Over the past several quarters, various manufacturers, such as Seagate, Western Digital, and Toshiba, have made production cuts to HDD. These cuts have begun to affect the market as lead times are starting to stretch by at least an additional 2 to 3 weeks, depending on the manufacturer.  

Open market inventory that previously held the most attractive pricing has depleted, and manufacturers are closely monitoring end customer ordering patterns to prevent excess stock from replenishing available market supply. HDD demand is flat, but with reports of rising costs for raw materials and production impacting manufacturers as early as July, pricing will continue to increase as companies plan to expand capacity once the demand is more sustainable.  

SSD vendors have shared that Samsung's SSD ordering is on hold across all series. This move is likely in preparation for a price hike of between 5% and 10%. Demand for SSDs is relatively low, except for high-capacity products, which has been heightened for some time now thanks to demand from industries like AI.  

Memory Manufacturers Delay Quotes and Hold Shipment Until Further Notice  

The speculation that memory module pricing may increase has caused an uptick in demand. Manufacturers are reportedly delaying quotes and holding shipments until further notice, which supports the possibility of pending cost adjustments.   

With manufacturers seeing more activity, particularly from tier 1 customers, open market pricing has increased by at least 2% to 3%. Since costs in the open market are escalating, vendors have shared that they have seen more inquiries across all memory modules.  

Nvidia Struggles With Heightened GPU Demand Amidst New Product Announcements  

Nvidia has announced the latest three workstation RTX GPUs based on the Ada Lovelace architecture. The new products, the RTX 5000, RTX 4500, and RTX 4000 ADA, deliver the best in AI, graphics, and real-time rendering.  

Overall, consumer graphic card demand has stayed soft, especially for low to mid-end series. Supply remains limited for high-end series like the RTX4090, primarily due to the inadequate allocation of GPU chipsets and mounting demand for the RTX4090 blower and turbo series. Nvidia is actively working to dissuade AI and enterprise customers from turning to alternative products. However, alternatives may be the customer's only option if supply constraints persist, despite Nvidia's recommendation to stay brand loyal.  

Demand is similarly heightened for the Tesla series of GPUs, with news confirming that the United States expanded its ban lists to include nations in the Middle East. The expanding limitations will likely impact supply and force open market pricing to be higher. Pricing trends show that costs increase by 3% to 5% weekly.  

Networking Product Competition Heats Up As Major Brands Struggle to Meet Demand   

Networking product purchases show no signs of slowing as AI and large-scale cloud service providers drive demand for optical cables, optical transceivers, network switches, and NICs. High-end series' supply for products like 200GBE, 400GBE, and 800GBE have been significantly impacted by the onset of orders. Lead times for specific products have extended up to 6 months, with the most in-demand seeing lead times up to one year longer than average.  

Due to the lengthy lead times, customers seek alternative brands with similar specs to support their needs. With supply set to remain limited through at least next quarter, many brands compete to fulfill the market's urgent demand.  

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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