Chip prices, lead times rise as inventory
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Analog chip prices and lead times are rising as manufacturers clear their backlog of inventory.
Texas Instruments is raising its process by 30% on a wide range of analog parts, while prices are doubling on some data converter parts, according to investment analysts at Bernstein in the US. This is aimed at increasing the margin on parts rather than a response to shortages, they said.
This comes as TI is ramping up high volume production of analog parts on 300mm wafers at its fab in Richardson, Texas, with plans for another three fabs underway in a $60bn investment.
The inventory backlog over the last two years was the result of the shortages during the Covid-19 pandemic, where manufacturers ordered from multiple sources. It is also the result of the cost of global living crisis driving down demand.
Distribution trade group FBDi in Germany sees the market improving in the second half of 2025 as a result of the inventory reducing.
Supply chain management
“Five years on from the COVID-19 pandemic, supply chain resilience has become a top priority for businesses,” said Simon Hinds at supply chain management company Octpart. “The pandemic highlighted the vulnerabilities in global supply chains and underscored the need for robust risk management strategies. Companies are now focusing on diversifying their supplier base, investing in automation, and enhancing their digital capabilities to build more resilient supply chains.”
He points to the increased use of generative AI for supply chain management.
“Generative AI is revolutionizing supply chain risk management by continuously analyzing vast datasets to identify potential risks and generate insights. Unlike traditional rule-based systems, GenAI learns and adapts over time, allowing supply chain managers to anticipate disruptions and develop effective mitigation strategies. By analyzing both structured data such as transaction records and inventory levels and unstructured data such as news articles and social media posts, GenAI provides a holistic view of the risk landscape.”
Distributors pointing to an upturn.
“All the signs are showing that the market is picking up rapidly, and the theme from many suppliers at our recent sales conference centred on their concerns that if customers do not start placing backlog now, they will run into problems later this year as lead-times are forecast to quickly lengthen,” said John Bowman, marketing director at UK distributor Anglia.
www.octopart.com; www.anglia-live.com; www.fbdi.de
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