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Component prices set to ease
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Friday, September 24, 2010
The price increases component makers have enjoyed for the past several quarters are coming to an end, as prices are expected to slip on softening demand starting in Q1 2011. Lead times, however, will remain extended, complicating the electronics supply chain.
That's according to a recent report from iSuppli Corp, which states that after more than a year of increases, prices for discrete components are set to begin to decline in the first quarter of 2011 as demand softens during the seasonally slow period.
"Across the board, discrete components-including bipolar power, power MOSFETS, small signal, and rectifiers-are forecasted to decline in price during the first quarter of 2011," said Rick Pierson, senior analyst at iSuppli Corp. "While such drops-amounting to less than 1% for all discretes-won't come close to offsetting the gradual increases that have happened since October 2009, the price reductions at the very least will give buyers some relief from demand outpacing supply."
ASPs (average selling prices) for all discretes are expected to continue to move upward in 2010 until supply comes into balance with the heavy demand situation. Still, iSuppli warned that even when discrete prices begin to decline, buyers may still have some challenges obtaining parts. As has been the situation in recent quarters, delivery lead times for discretes will continue to extend well beyond normal parameters, possibly by as much as 20 weeks or more in some cases.
According to iSuppli, prices for bipolar power components have increased during the past 12 months. The research company said it expects that trend to continue through the remainder of 2010 and then level off for the first half of 2011.However, lead times will continue to extend into Q3 and Q4 of 2010, with some suppliers quoting as much as 26 weeks or more. While iSuppli projected that these lead times will fall in the first half of 2011, it said the lead times remain bloated at about the 18-week range.
Lead times are also being extended for MOSFETs as demand outpaces supply. ISuppli said that pressure from both the front and back ends of the supply chain is continuing to stress the power MOSFET market, causing lead-time extensions and the allocation of certain devices from a number of suppliers, including On Semiconductor, Fairchild Semiconductor, Infineon Technologies, and International Rectifier. Pricing is expected to stabilize in the first half of 2011, but iSuppli said it expects bottlenecks in the power MOSFET market to continue despite demand-driven production expansion efforts.
Small signal transistors and rectifiers will continue their price uptick for the remainder of 2010, with prices then falling early in 2011, iSuppli estimated. Much like other components, small signal transistors are also experiencing larger-than-normal lead times with no relief in sight. Even in Q1 2011, iSuppli sees small signal transistor lead times at 20 weeks or longer.
As for rectifiers, iSuppli forecasted prices to continue increasing for the remainder of 2010 until Q1 2011. Lead times for rectifiers will continue to be unusually extended, lasting as much as 20 weeks or longer. ISuppli attributed that to an increase in demand and to capacity constraints.
By: DocMemory
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