What They Say
Reuters reports that Qualcomm is ‘struggling to keep up with demand’. Samsung is said to be short of enough APUs for its mid-range and low end smartphones. Qualcomm is said to be short of meeting demand because of an increase following the reduction in business by Huawei.
The strong demand is driving prices up and Reuters said that a commonly-used microcontroller-unit chip from STMicroelectronics originally priced at $2 now sells for $14, according to Case Engelen, CEO of Titoma, a contract designer and manufacturer.
A company in electronics manufacturing said:
“We have seen components where we see a six-week lead time, and then the week after it’s ten weeks, and then a week later it’s one year,” he said.
What We Think
Not strictly a display story, but there’s no point in making displays if you have no smartphones to put them in.
Many, many years (decades) ago, I was in the steel business. There was a particular factory that made basically all the scaffolding in the UK for just a small number of companies. Deliveries were 6-8 weeks, which was about the planning time. One company decided to boost its stock to deal with an expected boost in the building industry. Deliveries went out to 10-12 weeks. This spooked the other buyers, who added orders, so they went out to 14-16. The first company decided it needed to book allocation and ordered more. Eventually, after a few weeks, deliveries were being quoted at 4 years! One of the companies decided to cancel a lot of orders, several years distant. That reduced the lead time and in 7 days, everything got cancelled and we were back to 6/8 weeks! The episode caused chaos and as a result, we ended up negotiating long term supply deals with guaranteed minimum purchases and supply, which stopped it happening again.
The point is that signals in the market such as a change in lead time cause effects to the behaviour of buyers and of sellers. (BR)
