Quarter 2 Market Conditions Update

We have all read and heard about the supply chain issues over the past few months. Now, the reality is setting in with shortages and allocations. These shortages did not start with the pandemic but have been coming for some time. And these shortages are not going to end any time soon. It will take billions of dollars of investment in infrastructure to expand production. The root cause changes with every article you read, the podcast you listen to, or the daily newscast. The concepts of legacy supply chain principles are no longer relevant. Lean inventory, Just-in-time Inventory Management, and Kanbans are becoming obsolete in many industries.

No matter the blame, we look forward to the future and produce solutions. Here at Burton Industries, we lose sleep over our customer’s success and future growth. We are pivoting quickly from legacy supply chain principles to resilient supply chain practices. Let us guide you through this strained time. We will keep you moving forward and put plans in place for future projects.

Attached is a summary of component lead times and pricing trends referenced from the “Futures Market Conditions Report” for Quarter 2- 2021.

-Discretes: Pricing and lead times increasing across the board.

-Surface Mount General Capacitors (ceramic):  Overall, pricing steady with lead times of 18-48 weeks

-Passives: Mix of increasing pricing and lead times with many moving into the red category.

               -Trimmers & Pots: increased pricing and lead times 10-12 weeks

-Electrolytic: Increasing lead times with a mix of increased pricing. Lead times 14-32 weeks

-Capacitors (film): Mix of stable pricing with stable lead times of 10-36 weeks

-Capacitors (tantalum): Mix of stable pricing with increased lead times  4-46 weeks

-Capacitors (polymer tantalum): Mix of stable pricing with mix of lead times 20-30 weeks

-Filters: Mix of stable pricing and increased lead times 20- 40 weeks

-Inductors: Mix of stable pricing and increased lead times 12-30 weeks

-Fixed Resistors: Increased pricing and increased lead times 30-52+ weeks

-Resistor Networks: Increased pricing and increased lead times 15-40 weeks

-Batteries:  Stable pricing and stable lead times 8-38 weeks

-Electromechanical:

-Switches: Mix of stable pricing with increased lead times 10-18 weeks

-Fans: Stable pricing with mix of increased lead times 12-24 weeks

-Connectivity:

               -Wi-Fi modules: Increase pricing and increased lead times 24-30 weeks

               -Bluetooth modules: Mix of stable pricing with increased lead times 16-30 weeks

High End:

               -Microchip: Lead time and pricing increases for MCU (8 bit & 32 bit), PHY/Ethernet, USB, and 32 bit MPU 30-55 weeks

               -NXP: Pricing increase for 8 bit MCU, Automotive, 32 bit MPU, and Network Processors. Increase in lead times for all above including 32 bit MCU. Automotive allocation and 26-52 weeks on the rest

               -Renesas: Stable lead times and pricing Automotive, increase of lead times and pricing on 8 bit MCU, increasing lead times with steady pricing for 32 bit MCU, and steady lead times and increased pricing for 32 bit MPU. Average lead times 30 weeks

               -ST: Increased pricing and lead times for 32 bit MCU and allocation for 8 bit MCU, 32 bit MCU, and Automotive.

Our supply chain team is reviewing contraints reports daily to ensure fast action as conditions change. When new contraints are identified, purchasing, program management and engineering review options for alternate suppliers and/or substitutes. Watch our blog for further updates on trends and the tools we are using to address availability issues and pricing increases.

January 2021 Material Trends Update

There are multiple drivers of materials constraints in 2021. First, pent-up consumer demand is driving spikes in products across multiple sectors that were in short supply in 2020 due to the pandemic. The automotive sector is seeing both pent-up demand across all models plus increased demand for electric vehicles. Communications and IoT are also driving demand and 5G will only escalate that as more infrastructure is being installed. WiFi and Bluetooth modules are increasing lead-times and we expect pricing to follow. And COVID-19 continues to drive increases in medical equipment demand. As a result, we feel constraints will continue throughout the year and are starting to see both allocation and price increases.

We are seeing price increases from multiple suppliers. Basic materials costs for PCBs and components have increased, freight costs are up and COVID-19 mitigation is also a cost driver. We are also keeping a close eye on component quality, as we’ve seen failure rates go up when suppliers reach capacity.

The color-coded chart highlights trends by commodity. Here are the specific trends we are seeing based on the information we are receiving from distribution.

  • Discretes: Pricing and lead-times increasing across the board; however, there are still a few manufacturers w/stable lead-times and prices
  • SM Gen Capacitors (ceramic): Mix of increasing pricing and lead-times, still some stable lead-times and pricing
  • Passives: Stable price and lead-times of 14-16 wks, however, passives are moving more into a yellow/orange category and we expect to see a move into red by mid-year
    • Trimmers & pots – stable price and lead-time 10-14 wks
  • Electrolytic: mix of increasing lead-times and prices increasing; some still stable
  • Capacitors (film): Mix of stable pricing and lead-times, some increasing lead-times and pricing
  • Tantalum:  mix of stable pricing, lead-times running 14-52 wks and increasing lead-times and pricing
  • Polymer tantalum: Mix of stable and increasing pricing and lead-times
  • Filters: mix of stable and increasing lead-times and pricing
  • Inductors: majority stable pricing and lead-times, few increasing lead-times and pricing
  • Fixed Resistors: mix of stable and increasing lead-times and prices
  • Resistor Networks: mix of stable and increasing lead-times and prices
  • Surface Mount General Capacitors (ceramic): stable pricing, lead-times 20-24 wks
  • Batteries: stable pricing on majority, stable lead-times 8-38wks
  • Sensors/Switches:
    • Diodes Inc.: lead-time is increasing 12-14 wks, pricing stable
    • Ams: lead-times 8-30 wks, stable sensor prices and lead-time
    • NXP: increasing lead-times and prices 32 week LT for sensors
    • On Semi: increasing lead-times, pricing stable
    • Renesas: lead-times up to 20 weeks, stable pricing
    • ST Micro: lead-times stable around 20 weeks, pricing increasing
    • Infineon: 25-plus week lead-times on switches, pricing stable
    • Melexis Sensors: lead-time stable at 16-46 weeks, price stable
    • TE: lead-time stable at 30 wks, pricing is stale
  • Fans: mostly stable, few increasing lead-time and prices
  • Connectivity:
    • AMS: RFID chips lead-time up to 30 wks, pricing stable
    • Laird: WiFi modules stable; antennas, pricing and lead-time increasing
  • High end:
    • Cypress: lead-time and prices increasing for Bluetooth modules, lead-times increasing across high end
    • Microchip: lead-time and prices increasing
    • NXP: pricing is increasing, lead-time stable for all except chip solutions; high end parts, automotive on allocation
    • ST Micro: increasing for 8 and 32 bit mcu lead-times
    • Murata: prices stable, lead-time increasing 30 weeks

Here are the manufacturers we are monitoring closely for increases in lead-times and pricing:

  • ST Micro – price increases across all lines, allocation has begun
  • Panasonic – shipping delays causing increased lead times
  • NXP – increased prices
  • Silicone Labs – increased prices
  • Microchip – no cancellations within a 90-day window.

August 2018 Supply Chain Trends

We continue to see lead-times stretching out across a number of components. InAugust Trending Info general ceramic capacitors, we see allocation at many suppliers, increasing lead-times and price increases. In fixed resistors, RoHM is not accepting orders, PSC is heavily constrained and has 52+ week lead-times. At other manufacturers we are seeing lead-times range from 8-30 weeks. Tantalum capacitor lead-times have increased from 15 to 28 weeks. In MLCCs, Murata and TDK are on allocation. Lead-times in general are running 12-30 weeks. Automotive components are the most heavily affected. STMicro is increasing lead-times across the board on all their products. We’ve included a color-coded chart highlighting trends in all commodities as of end of August 2018.

Burton Industries’ customers can contact their CSR and request a current spreadsheet outlining these trends by component type and manufacturer.