Lead Times Extend Up to ‘420+’ Days for Some Chips, Philips Tells BIS

“Inventory/buffer stock” in semiconductor products across the board “has been all depleted” amid shortages of wafers, raw materials and packaging materials, commented Philips in docket BIS-2021-0036 in response to the Commerce Department’s request for information about the global semiconductor crunch. COVID-19 factory closures, labor shortages, inflation and the “strong demand increase” in the automotive, consumer electronics, computing and communications sectors are exacerbating the crisis, it said.

Philips estimates current lead times for discrete transistors and diodes can extend up to “420+” days, compared with 56-64 days during 2019. Current inventory days on hand of all types of semiconductor products are down to zero, compared with 30-60 days two years ago, said Philips.

RFI submissions were due Monday at the department's Bureau of Industry and Security to help the secretaries of Commerce and Homeland Security prepare a report on the chips crunch for the White House by the one-year anniversary of President Joe Biden’s Feb. 24 executive order (see 2109230038). Virtually all companies that responded to the RFI filed business-confidential submissions to hide the public disclosure of sensitive trade-secret information that BIS had asked for on sales in the past month and on specific bottlenecks upstream and downstream in the supply chain (see 2111070003).

Technicolor's chip supply chain "has experienced significant challenges during 2020 & 2021 due to the COVID-19 Pandemic," commented the company's connected home division, which supplies home gateways and set-top boxes for network service providers. "Chief among them is a widespread global semiconductor shortage, coupled with unanticipated rising demand for semiconductors needed during the pandemic response. Part of this challenge is the result of limited capacity and constrained investment from the IC industry to support the demand increases."

Shortages in "higher node" chip technology and 8-inch wafers are especially acute, affecting Technicolor's "ability to manufacture customer premises equipment," said the company. "Recovery is anticipated to be long and bumpy with shortages likely to last until 2H 22 with high uncertainty." There are "limited short-term options due to long lead-time and high cost to build and add new capacity at the IC manufacturers (foundries) that support our business," said the company. "Frequent disruptive events have added stress to our IC shortages as well, such as the COVID-19 surges in Asian countries which have caused government mandated shutdowns in key IC manufacturing sites.",

Cost increases are "very abundant" in the semiconductor supply chain "and are coming from several sources," said Technicolor. Raw materials prices are soaring, and foundries "have increased wafer costs multiple times in 2021 and this is expected to continue in Q4," it said. "IC suppliers are requesting customers to pay expediting fees to secure supply from foundries, and logistic fees are ever rising from our freight forwarders. Cost increases like this are not standard in the semiconductor market and go against 'Moore’s Law,' which is why they were not foreseeable or expected."