According to the distributor, ‘lead times are likely to move out rapidly’ as the market picks up. Its comments come in response to growing concerns that lead times are thought likely to extend out as the year progresses, now that the market appears to be picking up.
News from several sources suggests that the excess inventory which has built up over the past two years has mostly been consumed, and now suppliers are looking at price rises.
Texas Instruments, for example, has implemented global price increases covering over 3,300 analogue product SKUs. Analysts, Bernstein, have noted that while the majority of the price hikes are below 30%, targeting general-purpose analogue components where competition is fierce, a smaller portion of high-precision ADC/DAC chips, will see price increases exceeding 100%.
Anglia warns that all the signs are flashing red suggesting that the market is picking up rapidly, and that customers will need to start placing orders soon as lead-times are expected to quickly lengthen.
While it’s not surprising that a distributor is keen to encourage customers to place orders early, if demand does recover in the way its predicted, being vigilant and moving quickly to avoid any supply chain chaos may prove to be sage advice.
