TAIPEI (Taiwan News) — Delivery times for some semiconductors have now been stretched to almost two years amid the continuing global chip crunch.
Lead times for semiconductor orders are five to 15 weeks longer in February compared to October, Nikkei cited U.S. electronic component distributor Sourcengine as saying. Wait times for 16-bit processors used in general-purpose products average 44 weeks, an increase of 15 weeks from October, while lead times for power chips have increased by nine to 37 weeks.
The longest lead time for processors hit 99, per the report.
Part of the reason for the backlog in orders is demand outstripping supply, while another factor is chipmakers focusing on cutting-edge silicon over more mature processes used in commodity products. Semiconductor prices are also increasing, with the average sticker price for processors and other chips jumping 15% or more in a year, said Nikkei, citing data from American research firm Gartner.
In order to avoid cutting production, manufacturers are now trying to increase chip inventories, which has further increased demand.
Chipmakers have been focusing on upping production, with wafer shipments increasing by 14% in 2021. One U.S. trade group estimates that factory utilization rates hovered around 90% in 2020 and 2021.
Yet with chipmakers placing priority on advanced chips, production capacity for semiconductors using 40 nanometer and older processes only grew by 4% in 2021. Meanwhile, capacity for chips 28 nm and smaller grew by 13%, according to consulting firm McKinsey & Co.
Another concern raised by the Nikkei report is that companies' build-up of chip inventories could affect future semiconductor demand. A cool down in sales could leave the industry staring at a major supply glut.