The US economy and consumer confidence continues to sputter a bit as people try to suss out whether or not there will be a 'double dip' recession. Regardless of these attempts at reading Wall Street's tea leaves, there are real supply chain data being punched out from the semiconductor industry as back-to-school is underway.
There are sales problems to be sure, just not the ones you might think. Smartphones are feeling the pinch, but not because of tight purse strings from consumers (cf. this recent story from Manufacturing Business Technology). Nope, our problems continue to be on the supply side – with shortages having strained the supply chain during the past two quarters, and then the heavy sales by Apple's iPad and iPhone 4, manufacturers are scrambling to meet the demands of OEMs, including Apple (anyone seen a consumer with a white iPhone 4 yet? Didn't think so).
This is just one example of the effects of supply shortages, but it translates into seriously disruptive variables for the competitive landscape. If you want to compete in the marketplace, well, you've gotta have product… It's not just the domain of smartphone wars either, Nissan had to close six car factories this July due to STM chip shortages; similarly Cisco, Alcatel-Lucent and Ericsson were hurt this summer due to an inability to get their end products manufactured and delivered (as reported here by Electronics Weekly).
The shortages are not over, and we're in the midst of upward demand cycles – will EMS and ODMs have the product they need for OEMs to deliver for their consumer and corporate sales? It's a better bad situation to be in than the reverse (staring at your growing inventory), but the end results are the same: slowing revenue! It's still wise to get your order forecasts in early, in fact, it might be mandatory.
A quick look at many component samples reveals that lead times have worsened for a wide range of semiconductor discrete devices, with lead times running as much as 100 percent longer than for the same period last year. The shortest lead times—at 10 weeks as of July—are for connectors, up from 5 weeks in July 2009. The longest lead times are for rectifiers and small signal discretes, now running at 20 weeks—a full five months compared to 10 weeks last year at this time.
Despite what some reports are saying, the supply chain data don't point to an easing of shortage conditions for us this year, regardless of what Wall Street says about lowering quarterly revenue forecasts for investors by some of the bell-weathers.
UPDATE: Readers may also like to consider this summary by EETimesAsia of the recent Gartner report reviewing 2H10 forecasts.