Analyst says chip shipment delays are in the “Danger Zone”
Susquehanna analyst Chris Rolland disseminated a note to clients yesterday in which he wrote about lead times for analog chips, power management chips, and others. “All major product categories up considerably. These were some of the largest increases since we started tracking the data,” he stated. Apple has said that it could lose up to $4 billion in revenue during the current quarter thanks to shortages of chips and other components, while automakers are are on track to report a revenue shortfall of $110 billion this year.
The analyst said that the 17 week lead time expanded from the previous 16 week lead time and marks the fourth consecutive month that lead time has risen by a “sizeable” amount. Power Management chips lead time weighs in at 23.7 weeks, up about four weeks over the last month. Industrial microcontrollers order lead times have recently risen by three weeks.
Susquehanna says that delays are longer for smaller manufacturers; for example headphone manufacturers have lead times longer than 52 weeks! The expanded lead times has forced firms to redesign, and even drop projects. Rolland says that 70% of the companies he tracks in the chip industry are reporting expanding lead times while 20% have seen lead times drop.
TSMC faces delays thanks to COVID and a drought
Taiwan, the home of the world’s largest independent foundry TSMC, has been dealing with a couple of issues that could impact chip production in the country. The number of COVID-19 cases in the country has been rising and in addition, a drought has impacted the country. Water is an important ingredient when it comes to chip making and TSMC has ordered huge deliveries of the ultra pure water required to run its assembly lines.
Also today, Taiwan’s Water Resources Agency said that the country needed to use more aggressive water-saving methods thanks to the low amount of rain that has fallen in the country. TSMC responded by saying that it will continue to tighten up its water usage, although it doesn’t believe that it will have to make any changes to its operations even with the countries new measures announced today.