Chip Delivery Time Surpasses 20 Weeks in No Sign Shortage Easing

The shortages are getting worse, not better, according to research by Susquehanna Financial Group.


August 10, 2021

1 Min Read
Silicon wafer fabrication
Silicon wafer fabricationKAZUHIRO NOGI/AFP via Getty Images

Ian King (Bloomberg) -- The amount of time it’s taking for chip-starved companies to get orders filled has stretched to more than 20 weeks, indicating the shortages that have held back automakers and computer manufacturers are getting worse.

Chip lead times, the gap between ordering a semiconductor and taking delivery, increased by more than eight days to 20.2 weeks in July from the previous month, according to research by Susquehanna Financial Group. That gap was already the longest wait time since the firm began tracking the data in 2017.

Shortages of microcontrollers, logic chips that control functions in cars, industrial equipment and home electronics jumped in July, according to the report. Lead times for that type of chip are now 26.5 weeks, compared with a typical range of six to nine weeks. In better news for industries that rely on semiconductors, the lead times were reduced for power management chips, semiconductors that regulate the flow of electricity in everything from smartphones to solar power generation.

Shortages of semiconductors have been felt the most in the automotive industry, which is forecast to lose more than $100 billion in sales of vehicles it can’t make. Other areas have been pinched, too, with many electronics makers, including the biggest companies such as Apple Inc., unable to meet all the demand for their products.

Investors watch lead times looking for clues as to when users of semiconductors are over-ordering and building inventory, usually the herald of a slump in demand. Chip industry executives have cautioned against making that assumption this time, arguing their customers are more willing to make long term supply commitments than in the past.

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