Realtek says ‘No Delivery Dates’
Top 10 fabless IC supplier Realtek (2379.TT), has indicated to customers that their ‘possible future delivery period’ has been extended to 32 weeks or more, subject to modification. Realtek is a supplier of ICs primarily for networking (Bluetooth, Wi-Fi, Ethernet) and media processors, along with various IoT controllers and is among the top 10 fabless semiconductor producers. The letter to customers further indicates that after new orders are received, ‘the delivery date will not be arranged temporarily, and the possible delivery date and number of shipments will be notified within 12 weeks after the order is available’, which we take to mean that the company will give no delivery date until 12 weeks after they begin production on the specific item.
This comes after Broadcom (AVGO) told customers that its lead times had extended to 50 weeks, with some products extending to more than one year, adding communication chips to the list of those in very short supply. As inventories are run down. Fab resources are under such pressure that we expect only the largest customers are receiving product and likely even those are under allocation, leaving smaller customers to wait 6 months or longer for key components, delaying plans for new product. We expect we have yet to see the true impact of the shortages as inventory levels have allowed semiconductor customers to continue to produce product, however limitations on product releases and new product development will be the result.
While we expect foundries to continue to run at full utilization for much of this year, we expect only the largest customers will be able to build enough semiconductor inventory to keep to ‘normal’ product release schedules. If these shortages persist OEMs and assemblers will have to take on greater (and earlier) inventory to make sure they are able to meet production and assembly schedules for products due in 2H.
This comes after Broadcom (AVGO) told customers that its lead times had extended to 50 weeks, with some products extending to more than one year, adding communication chips to the list of those in very short supply. As inventories are run down. Fab resources are under such pressure that we expect only the largest customers are receiving product and likely even those are under allocation, leaving smaller customers to wait 6 months or longer for key components, delaying plans for new product. We expect we have yet to see the true impact of the shortages as inventory levels have allowed semiconductor customers to continue to produce product, however limitations on product releases and new product development will be the result.
While we expect foundries to continue to run at full utilization for much of this year, we expect only the largest customers will be able to build enough semiconductor inventory to keep to ‘normal’ product release schedules. If these shortages persist OEMs and assemblers will have to take on greater (and earlier) inventory to make sure they are able to meet production and assembly schedules for products due in 2H.
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