Shortage of components
The COVID-19 pandemic has caused an imbalance in supply and demand of components globally. This has affected the Technology (IT + consumer electronics), Automotive and (electronic) manufacturing industries. People were also affected by either losing their jobs or being forced to work from home. This led to a decrease in demand for some products (eg: cars). However, it also led to an increase in demand for technology products (eg. Laptops, tablets, phones, gaming consoles, etc) as working from home became the norm. While car manufacturers decreased their component orders, chip supply manufacturers catered to the Technology industries to meet their increasing demand.
With the economy slightly improving and the increase in demand from other industries (besides technology), semiconductor manufacturers are working hard to fill the gaps in supply. However, we do not think this will be filled anytime soon.
Semiconductor and micro-controller manufacturers such as NXP, Microchip and Silicon Labs have increased their lead times for their components to 20+ weeks. Discrete devices manufacturers such as Diodes Incorporated, TE Connectivity and Murata have also increased their lead times between 14-36 weeks. (Source)
Counterpoint Research has predicted that shortages for some products may continue for several months – possibly well in to 2022. (Source).
Here is an example of the change in lead times for Silicon Labs Timing Products (one of the biggest IC manufacturing companies globally):
|Clocks (Si534x/7x/8x/9x) |
Si537xJ & Si539xE/J/K/L/M ordering grades only
|20 weeks |
|26 weeks |
|Clocks (Si531x/2x/6x/7x)||20 weeks||26 weeks|
|Clocks (Si5350/51)||20 weeks||26 weeks|
|Clocks (Si5338)||10 weeks||10 weeks|
|Clocks (Si5332) |
Si5332E/F/G/H/L ordering grades only
|20 weeks |
|20 weeks |
|Clocks (Si512xx, Si52xxx)||20 weeks||26 weeks|
|Clocks (Si5321)||20 weeks||40 weeks|
|OSC (5xxxxxxxxxxxxxxx) |
|10 weeks |
|12 weeks |
|Buffers (Si53xxx)||20 weeks||26 weeks|
|Sync modules (M6x, M88)||8 weeks||20 weeks|
|RF Synthesizers (Si41xx)||8 weeks||8 weeks|
|PHY (Si5040)||10 weeks||10 weeks|
|Samples (All Product Lines)||5 weeks||5 weeks|
Table: Change in lead times for Silicon Labs Timing Products
IMPACT OF CLIMATE CHANGE
The severe winter storm in Texas earlier last month (which is usually unheard of) also played a significant role to the shortage in components. Texas experienced widespread power disruptions amid the storm, which prompted local authorities to ask companies to reduce operations. This was to minimize demand on the state’s power grid. Samsung Electronics, one of the world’s largest chip makers, operates two component manufacturing facilities in Austin, Texas. They were asked by local authorities to shut down as well (Source).
SHORTAGE OF PCB RAW MATERIALS
The shortage of PCB raw materials (including FR4, PP) has led to an increase in lead times and prices. In our January article, we highlighted that KB (one of the largest PCB raw material suppliers in China) increased their prices every month towards the end of 2020.
As predicted in the January update, all of our suppliers have followed KB’s lead and increased their PCB manufacturing prices as well.
Some of our suppliers have increased their production capacity (to meet demands) but their output will highly depend on how easily they can get hold of the raw materials. The raw material suppliers have also increased their production output, but unfortunately it is still not enough to meet the current requirement in the market. We predict that this gap will be filled sometime in June this year.
WHAT YOU CAN DO:
We highly recommend customers to submit their PCB purchase orders in advance or as soon as possible; especially if you require a rigid flex, HDI, heavy metal, 8L or above.
We have been informed by our PCB suppliers that some of their customers have already placed PCB orders for delivery in August/September 2021.
Because of the shortage in component availability, we also recommend customers to submit their PCBA orders as soon as possible. Please contact our account managers to get an estimate on delivery timelines.