The market is experiencing longer lead times and higher prices for memory ICs due to strong demand and limited supply. Prices for some components on the open market have doubled or even tripled. In some instances, memory IC manufacturers are refusing to take orders because of backlog.
The shortage of memory ICs is expected to continue into the first quarter of 2018, with tight supply expected into the first half of the year. This could be good news for independent distributors with shortages, strong market demand and higher prices, as electronics buyers typically seek independent distributors when parts are in short supply.
One major factor causing change in the market this year includes the release of new iPhones, which is triggering an impact within the supply chain and component shortages. About 18% of global annual supply of NAND chips is purchased by Apple, resulting in electronics manufacturers feeling the need to purchase big volumes in the beginning of the year to avoid being squeezed by Apple.
Furthermore, some memory IC manufacturers have shifted some DRAM capacity to flash, which is causing a shortage of DRAM within the market. All of these market changes are prompting lead times to now range from 24 to 52 weeks, where normal lead times would be about 12 to 15 weeks.
Advanced MP Technology’s Market Intelligence team is constantly researching the quickly changing trends in the market to plan and prepare ahead. This allows Advanced MP Technology to provide the absolute best quality products to our customers on time, every time.