According to top market research companies, chip delivery times are shrinking, but shortages persist in many areas.
In July, lead times — the time it takes from ordering a semiconductor to delivery — averaged 26.9 weeks, down from a revised 27 weeks in June. Lead times have narrowed for three consecutive months.
Although the overall indicator improved, automakers and industrial equipment manufacturers continued to struggle to get power management parts and microcontrollers, the study showed. Power management chips, for example, had a longer lead time in July, averaging 32 weeks compared to 31.3 weeks before. The price of some products is still rising.
According to Susquehanna analyst Chris Rolland, “we are still waiting for inventory and overordering issues to subside in the broader industry.
According to Rolland’s market research, declines in demand for components used in smartphones and personal computers aren’t translating into an end to industrywide shortages. In a “healthy” market, lead times would be less than half as long.
A chip bottleneck has cost Cisco Systems Inc. and Ford Motor Co. billions of dollars in lost revenue because they can’t get enough semiconductors. This view contrasts starkly with what some chipmakers have reported in the current earnings season.
There has been a steep drop in demand from personal computer makers, according to Nvidia Corp., Intel Corp., and others. Data centers that serve as the backbone of the internet and corporate networks are also starting to purchase fewer components, Micron Technology Inc. said.
In the second quarter, Mercury Research reported the lowest level of desktop processor shipments in nearly three decades. According to analyst Dean McCarron, processor shipments fell by their most since 1984.
A disproportionate amount of damage was inflicted on Intel. Meanwhile, Advanced Micro Devices Inc. made gains across the board.
According to McCarron, AMD’s share increased to 31.4% in the second quarter. According to him, AMD’s sales and market share improved for the 13th consecutive quarter despite a downturn in expensive server processor sales.
Investors have already concluded that the chip industry is entering one of its periodic downturns. This year, the Semiconductor Index on the Philadelphia Stock Exchange is down 24%.
