Various Production Issues Causing Disruptions for Cypress
- Spot shortages are increasing for most Cypress RAM products. The perfect storm of defective machines along with parting ways with their subcontractor in China is causing the issues. The expectation is that there will be supply problems into Q4 but the extent is not clear at this point.
- Flash product has also been affected – but for different reasons. Cypress pulled back on die when the pandemic hit as they saw demand from their customers dropping quickly. Now that demand is picking back up, they are increasing the capacity to keep up – but lead times are out 20 weeks (at least for Q3).
Analog Devices Is Planning to Buy Maxim Integrated
- Financial repercussions aside, mergers of this size tend to have long term effects on supply. Often times lines are discontinued with no replacement, part numbers change, part markings change, etc. The Infineon/International Rectifier scenario comes to mind where many IR3xx mosfets were/are being made obsolete without cookie-cutter replacements. Supply was constrained for months causing 400-500% premiums. This transaction is far from done and the implications are not known, but NewPower will continue to monitor the situation.
Desktop PC Demand Is Light but Processor Supply Decreasing as Well
- Through the first half of 2020 there were a glut of desktop processors in the market which caused a cascading price reduction of up to 30%. Recently there have been smaller spikes in demand in the APAC region which has slowly decreased available inventory. Most channel suppliers have not placed any orders to restock inventory due to the lack of demand on 8th and 9th generation. Although prices remain aggressive, there could be increases and spot shortages if demand turns.
Intel Releasing 11th Generation Tiger Lake Processors in Q3 – but Ice Lake Still in High Demand
- Rumors about the Tiger Lake processors have been circulating for months but it looks like the product will hit the market in Q3. The Tiger Lake processors have high end integrated graphics and are expected to challenge AMD in this arena. Despite the lofty expectations, there will be a transition period before mainstream adoption takes place. Ice Lake will remain short through Q3 with premium prices holding strong.
SSD Demand Looking for a Push From the Gaming World
- SSD sales are expected to increase toward the end of FYQ3 due to the ramp-up of production on the next generation of gaming consoles for the holiday season. While historically consoles have not affected this market, the next generation of PlayStation and Xbox consoles will be utilizing top of the line SSDs to bridge the graphics gap, attempt to eliminate load times and keep up with PC gamers.