Chip lead times , the gap between ordering a chip and taking delivery, increased to 17 weeks in April, indicating users are getting more desperate to secure supply, according to research by Susquehanna Financial Group. That is the longest wait since the firm began tracking the data in 2017, in what it describes as the “danger zone.”“All major product categories up considerably,” Susquehanna analyst Chris Rolland wrote in a note Tuesday, citing power management and analog chip lead times among others. That’s undercutting economic growth and employment, as well as raising fears of panic ordering that may lead to distortions in the future.The chip industry and its customers watch lead times as an indicator of the balance between supply and demand. NXP Semiconductors NV, a major auto chip supplier, has lead times of more than 22 weeks now, up from around 12 weeks late last year. Historically, companies have been able to cancel chip orders without penalty, although that has begun to change.“Beginning with January data, we have witnessed numerous large JUMPS in reported LTs,” Rolland wrote, referring to lead times.

Source: Economic Times May 19, 2021 05:27 UTC