Shocked ! ADI, Silicon Labs, MediaTek and other factories start price increases!

Maxim was officially acquired by ADI in August of this year. As the second largest analog plant, ADI has further narrowed the gap with TI. Prior to this, Meixin had a price increase of 6%. The ADI price increase this time is to retain the previous price increase of Maxim, plus the new price increase of its own products.

It should also be noted that in May of this year, ADI raised its price once to cope with rising upstream costs. At that time, the industry revealed that the margin was 25%, and the delivery period of some major products was extended to more than 30 weeks. After half a year, ADI's price increase again indicates that the fundamentals of the supply chain are still tense, and a reversal is almost possible in the short term.

Another original manufacturer, Silicon Labs, also issued a price adjustment letter, which shows that with the increase in costs of raw materials, wafers, packaging and testing, logistics, and labor, Silicon Labs will officially increase prices from November 28, and orders that have not been shipped will also According to the latest price.

It is understood that Silicon Labs focuses on the Internet of Things, Internet infrastructure and industrial fields, with product lines such as MCU, SoC, sensors and PMIC. In August of this year, Silicon Labs' infrastructure and automotive businesses were acquired by radio frequency giant Skyworks, with a transaction value of US$2.75 billion.

Let's look at the price increase of MediaTek and Realtek. On the first day of this month, Taiwanese media reported that MediaTek has increased the quotation of WiFi 6 chips by about 20%-30% this quarter, and Realtek has increased by 10% to 15% in October, and the cumulative increase has been at least 50% this year.

The price increase of the two major Taiwanese manufacturers is mainly due to the accelerated penetration of 5G and WiFi 6, which has brought new market demand, and the insufficient capacity of mature processes has caused the gap between supply and demand to widen. At present, the lead time for Netcom chip leader Broadcom has been extended to more than 52 weeks, and the price has risen by more than 20%. Driven by the leader, the price increase of the two major Taiwanese manufacturers can be said to be logical.

Wafer foundry capacity is lacking, and prices have been raised first

A large part of the price increase of chip OEMs comes from foundry. With the expansion of the chip market, the chip manufacturing process is becoming more and more advanced. Not only the Fabless factories, but also the product lines of many IDM factories also require foundry. In this round of core shortages, the foundry capacity continues to be in short supply, and the foundries have also increased prices frequently.

In October, foundries such as TSMC, UMC, and Power Semiconductor Manufacturing Co., Ltd. successively started price increases, pointing to industrial orders in the next year. Even GlobalFoundries, which has always been poorly managed, said that the current capacity utilization rate has been fully utilized, and even the capacity for 2023 has been fully booked. From these phenomena, it is evident that the foundry capacity is in short supply. The expansions that the foundries have already started are pointing towards 2023. Until then, the situation of insufficient production capacity will continue.

Under the background of insufficient foundry production capacity, it is not difficult to understand that the original manufacturers frequently send letters to increase prices. It was just after November, and another price increase letter was thrown out, which has not changed compared with the previous few months. In the short term, it is indeed difficult to expect this wave of price increases to stop. The chip market eventually goes smoothly, but it still depends on the reversal of the supply and demand cycle.