Buyers moved to secure analog chips as the latest survey recorded falling distributor inventories and higher prices, with majorities of distributors and direct buyers concerned about shortages over the next six months.
Among respondents, 73% had placed orders early or signed long-term supply agreements. Another 53% had added inventory or safety stock.
Concern about shortages rose three percentage points from the previous quarter, reaching 70% among distributors and 76% among direct buyers. Supplies exceeded targets for 38% of distributors and 26% of direct buyers.
At 85, the True Analog inventory index was 7% lower than in the previous quarter. The Power Analog index dropped 10% to 76. Both measures set the first quarter of 2024 at 100; compared with a year earlier, they were down 15% and 18%, respectively.
Average selling prices increased 12% for True Analog and 9% for Power Analog from the preceding quarter. The microcontroller inventory index stood at 91, 5% below the previous quarter and 3% lower than a year earlier. Microcontroller prices declined 7%, while prices for discrete components rose 34%.
At +79%, the net reading for expected near-term demand remained positive despite a 10-percentage-point quarterly decline. For recent demand, the net reading was +75%; readings for recent and expected price gains were +68% and +65%, respectively.
Meanwhile, 65% of respondents reported longer delivery times, up from 62% in the previous reading.
Second-quarter data showed analog chipmakers producing 7% more than in the preceding quarter and generating 11% more revenue, while their total inventory was unchanged. Microchip Technology’s days of inventory fell by nine to 175, and onsemi’s fell by 11 to 189. onsemi’s output was roughly in line with sales.
Distributors had not yet begun restocking. When they start replenishing inventories, and how long supply remains tight, are the next indicators for the inventory trend.
