IC shortages are beginning to bite as demand goes up, but suppliers remain reluctant to increase capacity while they are enjoying higher pricess.
"Component suppliers have yet to jump in with both feet when it comes to ramping up capacity," said Eric Pratt, vice president of pricing and competitive analysis at iSuppli, "and moving forward, component manufacturers will continue to take a very conservative approach to capacity expansion."
Shortages from ST, TI, ON, Broadcom and Fairchild are reported by FBR. Particularly serious shortages are recorded at TI, which is said to have increased some prices by up to 40%.
DRAM prices are expected to rise 60% to 70% this year, because of short supply, according to Semico Research.
Days of Inventory (DOI) are close to historical lows at nine of the 10 supply chain nodes tracked by iSuppli.
‘Many suppliers have no qualms with their current inventory position’, says iSuppli ‘one reason for the lack of interest in expanding production is that fourth-quarter earnings for component suppliers were exceptionally high’.
Multi-layer ceramic capacitors are generally in short supply, says FBR,
While distribution contacts continue to experience shortages of chips across product lines at Broadcom.
"As demand continues to rise, iSuppli believes the attitude of ‘do nothing’ will slowly change," says Pratt.
UMC and TSMC have production queues for 300-mm (longer queue) and 200-mm (shorter queue), though companies can jump the queue by paying more, says FBR.
Recently TSMC Chairman Morris Chang said he thought demand would drop in the second half, which may have been a justification for limiting capacity expansion.