Chip Delivery Times Fall by a Day as Companies See Some Relief

(Bloomberg) -- The delivery times for semiconductors fell by a day in June, a sign of modest relief after chronic shortages that have plagued automakers and other industries for more than a year.

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Lead times -- a closely watched gap between when a semiconductor is ordered and when it is delivered -- averaged 27 weeks last month, compared with 27.1 weeks in May, according to research by Susquehanna Financial Group. The measure was also 27 weeks in April.

“There are some signs of supply chain inflation easing and price increases slowing, but other pockets remain,” said Susquehanna analyst Chris Rolland in a research note on Wednesday. “Among key companies we track, NONE posted record-high LTs, perhaps another sign of ‘peak cycle.’”

Susquehanna said that leading or predictive company-specific data show contractions in lead times for the second month in a row, with some declines of as much as 45%. Some of the largest declines were for microcontroller units, or MCUs, as well as power management and memory chips.

Field-programmable gate arrays, or FPGA, lead times remain “maxed out at our 52-week cap and are likely THE most constrained part in the ecosystem,” the report said. Susquehanna added that FPGA shortages affect networking, optical and telecommunications gear.

Chip bottlenecks have hit companies from Toyota Motor Corp. to Apple Inc., costing them billions of dollars in lost revenue because they can’t get enough semiconductors to meet demand for their products.

Citibank analysts forecast this week that semiconductor sales will rise 13% for 2022. But they cautioned about risks because of a downturn in personal computers and smartphones, along with their projection of a recession.

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