Allocation has hit the analogue IC industry. "Distributors are on allocation with our competitors' products," says Lothar Maier, CEO of Linear Technology Corporation (LTC).
Maier adds: "Our competitors are talking about longer lead times - six, ten, thirty weeks in some cases on competitors' products - their customers are worried about allocation."
Maier emphasises that this does not apply to LTC where products are all on two to four lead times.
What made the difference between LTC and its competitors is that LTC maintained its manufacturing capacity through the downturn.
Whereas LTC's competitors were closing factories and out-sourcing manufacturing, LTC kept all its manufacturing facilities in place.
"Manufacturing was not run down, so we are in a good position to meet increasing demand", says Maier, "all our employees took a 10% pay cut. We thought: 'It's a really lousy time to be out of a job', so we kept our employee team in place, and made an enormous effort not to reduce the size of the organization."
As a result, says Maier: "We can hold lead times at two to four weeks even as times improve."
By contrast, the word on the street is that over 6,000 TI parts are on 18 week plus lead-time delivery at distributors.
Helping to keep LTC's lead-times to a maximum of four weeks is the LTC Die Bank where electrically tested products in wafer form are stored, which can be packaged and shipped in four weeks. "Usually less", says Maier.
LTC's sales are increasing quite fast, with a 14% jump in sales in calendar Q3 compared to Q2, with orders increasing every month throughout the quarter. It expects a two to five per cent increase in calendar Q4.
LTC's strong supply situation stems from its ability to make "virtually everything we sell", says Maier, "not because of cost, but because we can provide better quality and better customer support."
However, for those competitors which have cut manufacturing capacity and gone out to foundries, he predicts a grim future.
"Everyone is running to the sub-contractors and they are all full," says Maier, "the wafer sub-contractors are full. The assembly people are full."