Chip delivery times see biggest decline in years as shortages alleviate

[midian182]

What just happened? The chip crisis has been a depressingly familiar topic in news cycles over the last 12 months, but the bad old days of demand massively outweighing supply look to be over. More evidence of this is chip delivery times, which saw their biggest decline in years last month, falling by four days.

According to research by Susquehanna Financial Group (via Bloomberg), lead times—the time between a chip being ordered and when it is delivered—averaged 26.3 weeks in September. That's down from around 27 weeks the previous month. For comparison, the fall between July and August was a single day.

August's waiting period was still a lot longer than in pre-Covid times—it was just 12.7 weeks in October 2019—but the size of the monthly decline is significant. Bloomberg writes that all key product categories saw their wait times fall, with power-management and analog chips experiencing the biggest declines.

At its height, the chip shortage had a massive impact on industries such as auto manufacturing. And anyone who tried to buy a graphics card between mid-to-late 2020 and a few months ago will recall how bad things were.

Ironically, many industries are now suffering from the opposite problem. Consumer demand dropped after fabs ramped up production, Russia invaded Ukraine, and inflation skyrocketed, all of which have led to excess inventory. The oversupply caused graphics card, SSD, and RAM prices to crash. In the case of the latter two, manufacturers have been forced to reduce production. It's also seen companies such as AMD and Intel missing sales projections and, in some cases, laying off employees.

But not every market has seen its chip shortage-related problems alleviate. Dell CFO Tom Sweet said last month that the PC supply chain was back to operating more like its historic norm despite some issues remaining, but the server market continues to suffer due to the semiconductor shortage. However, the fall in lead times could ensure Sweet's prediction that tightness in the market will fall in Q4 is an accurate one.

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https://www.techspot.com/news/96354-chip-delivery-times-see-biggest-decline-years-shortages.html

 

[Burty117]

I recently read AMD are scaling back the production of Ryzen 7000 series due to lower than expected demand.

Not a single price drop has occurred, good to see they'd rather just not produce as many to keep the price high even though no one is buying them, a price drop would have convinced me to purchase one potentially.

On a related note, when do Intel's latest and greatest release?

 

[neeyik]

On a related note, when do Intel's latest and greatest release?

First Raptor Lake products are expected 20th October.

 

[Burty117]

First Raptor Lake products are expected 20th October.

Oh damn, ok, Will you guys have a review up on launch?

 

[neeyik]

Maybe. Let's see if Steve and Tim can survive for another week on just 2.1 hours of sleep

 

[WhoCaresAnymore]

Like the OP. Prices are WAY too high on products, especially GPU/CPU. Until prices have some serious corrections, I'm off the playing field. I am NOT going to support this blatant overpricing and inflated MSRP BS.

I've said it before and I'll say it again. Crypo destroyed the market. Hope all Crypto falls into the dark ages.

 

[WhoCaresAnymore]

Maybe. Let's see if Steve and Tim can survive for another week on just 2.1 hours of sleep

What's sleep? when I try to go to sleep all I see is spreadsheet formulas in my mind. I have to find the right formula that causes sleep.

 

[R00sT3R]

Feast or famine...the capitalist system in a nutshell.

 

[WhoCaresAnymore]

Feast or famine...the capitalist system in a nutshell.

Better than the alternative. Capitalism breeds competition. Then things get interesting.

You are welcome to fixed price/profit socialism-communism. Not interested. EXCEPT for healthcare. Healthcare doesn't need to be part of the whole open market system. In the USA it SUCKS. Need a surgery? better get that lawyer to file the bankruptsy. Your deductibles will kick your arse.

 

[Uncle Al]

My biggest concern is those companies building "chip factories" will see this as a reason to cancel their plans. Those companies most effected (auto makers, etc) need to plow ahead and get enough built to guarantee their future supply. The more makers the greater the competition, which in the end is best for the consumer.

The other issue that needs to be looked at by the auto makers is how many chips are "really necessary" in todays cars. It appears that far too many vehicle's are over burdening themselves when "everything digital" simply isn't necessary.

 

[Theinsanegamer]

My biggest concern is those companies building "chip factories" will see this as a reason to cancel their plans. Those companies most effected (auto makers, etc) need to plow ahead and get enough built to guarantee their future supply. The more makers the greater the competition, which in the end is best for the consumer.

The other issue that needs to be looked at by the auto makers is how many chips are "really necessary" in todays cars. It appears that far too many vehicle's are over burdening themselves when "everything digital" simply isn't necessary.

It's never been necessary, but consoomers have to have every bell and whistle, and offering them brings in the big dough.

I recently read AMD are scaling back the production of Ryzen 7000 series due to lower than expected demand.

Not a single price drop has occurred, good to see they'd rather just not produce as many to keep the price high even though no one is buying them, a price drop would have convinced me to purchase one potentially.

On a related note, when do Intel's latest and greatest release?

Well, from AMD's point of view their TSMC wafers are limited, if CPUs are not selling well then scaling back production and switching to GPUs or server parts that will sell in higher numbers is a good idea. Better then lowering margins on processors. They know that consoomers will break down sooner or later.

Now, if rDNA 3 doesnt sell well either, thats when the price cuts come into play.

Feast or famine...the capitalist system in a nutshell.

I'll take that over "Famine or gulag" any day.

 

[NikoBB]

I am sure that the surplus of components is a false statement a priori.

Just google, for example, 15.6" models on Zen3+ 66(5)0U/680(5)0U - and you will not find anything on the whole planet, except for the only Lenovo T14 model in retail! How is it, where is the abundance of long-awaited series on Zen3 + in U class?! They are not here.

It turns out that there is a monstrous shortage of high-quality laptops on newest SoCs and other equipment on the planet. And the price at which manufacturers are willing to sell (and make) it excludes mass demand. This is the classic definition of stagflation and recession.

 

[Kn0xx]

Big companys and big rollers, dont want to lower their incomes, thats why the high-prices, more money per item sold, and refuse to receive less money.
It time for hardware to hit a stagnation point, for software to evolve I think....
And yet every single market especulation is a motive to rise prices, which is a conserning feature we are facing in a globalized trading that was supposed to fix that.

 

[MarcusNumb]

The miners and the pandemia did a huge favor to NVIDIA and AMD cause they helped them to set a new bar for high prices. We are screaming for lowering prices but remember, even when they are lowered, they will be much higher than before. Here in Spain, now you have to pay at least 500euros for a 6700xt and 680euros for a 3070, and they have been lowered. I miss the day when I bought a Red Devil 5700xt for "only" 425euro, and it was one of the top 5700xt GPUs.

And every year they release new GPU or CPU with all-in marketing bs to push the price higher. Soon enough, 800euros will be the new norm for xx7x series, 1000 for xx8x and nearly 2000 for xx9x.

 

[Biostud]

I am sure that the surplus of components is a false statement a priori.

Just google, for example, 15.6" models on Zen3+ 66(5)0U/680(5)0U - and you will not find anything on the whole planet, except for the only Lenovo T14 model in retail! How is it, where is the abundance of long-awaited series on Zen3 + in U class?! They are not here.

They probably want to sell all their 5xxx/11xxx based laptops first.

 

[EdmondRC]

I recently read AMD are scaling back the production of Ryzen 7000 series due to lower than expected demand.

Not a single price drop has occurred, good to see they'd rather just not produce as many to keep the price high even though no one is buying them, a price drop would have convinced me to purchase one potentially.

On a related note, when do Intel's latest and greatest release?

To be fair, there are R&D costs and margins to deal with. You can't always make money by selling at a higher volume and a lower price. I'm not saying there is no room for a price drop, but they can't drop it through the floor and sell millions of units to make it up, the product still needs to sell at a decent profit margin. What is hurting sales of the 7000 series are MB and RAM costs, also, many AMD gamers will wait for the x3d if they are planning to upgrade soon. Especially since, by that time, you might be able to make up the difference in the 3d cache costs with lower MB/DDR5 costs.

 

[p51d007]

It's like the diamond "industry", keep supply low, to keep prices high.

 

[Burty117]

many AMD gamers will wait for the x3d if they are planning to upgrade soon.

That's exactly what I'm waiting for

 

[NikoBB]

It's like the diamond "industry", keep supply low, to keep prices high.

There is nothing immoral from the point of view of capitalism in this. Let me remind you that during the Great Depression in the United States, farmers poured barrels of milk into a ditch and bags of potatoes to keep prices at the level they needed so that their families would survive and live better than others, despite the fact that many people were starving and dying. You die today, and I tomorrow ..

At the same time, in the communist countries, in the 30s of the last century, food was simply taken from the peasants by force, under the threat of execution, because of which they massively died of starvation in order to feed the urban estates, on which the commissars depended much more strongly ( citizens are nearby, more socially active, more mobile and therefore more dangerous for the authorities).

And since hi-tech, a priori, is designed for consumption mainly by the middle class and above, I.e. here the elasticity of demand is much higher than in products for socially vulnerable groups, then prices can be manipulated much more strongly. But even there, in ordinary food products, in the same Europe, monstrous things are now happening, in general, in immoral business, which is easily proven if you track the real wholesale prices for everything and the already known warnings to business from the authorities.

Few people care about prices in high-tech - the authorities care little about the problems of the middle and higher classes, with the exception of the oligarchic strata, which have long grown together with the authorities in all countries without exception.

At the same time, the lower the sales in pieces, the higher the cost of batches and the cost of product development. It turns out a vicious circle - a drop in demand leads first to an attempt to tighten the elasticity of demand of target audiences, then in an attempt to drastically reduce costs (reduction of parasitic layers of inefficient workers), and then, if all this does not help, leads to the bankruptcy of all industries where the margin is insufficient for survival and some sufficient level of profit to live at the level that is considered adequate for its creators.
This is how the vicious goal of the degradation of civilization is launched. The more the population and the fewer people are involved in highly productive industries, the higher the social tension and the higher the risks of the global economy starting to unbalance on social unrest. Those same dark ages are coming, when people are no longer up to entertainment and all sorts of trinkets. The main thing is to survive and only the basic key goods for survival are important.

For example, in the past years, top-end video cards were swept away immediately from the shelves. Now 4090 is quietly in retail and nobody needs it ...

 

[poohbear]

I see many Z690 motherboards sold out, and the new AM5 motherboards are so expensive (they promote it positively as lasting for 5 years, so they're gonna charge us the price of 2 motherboards! lol so much for value!)...so where is this oversupply and cheap semiconductors market? Maybe Black Friday next month will change things, but don't have much hope for the new stuff.

 

[poohbear]

Feast or famine...the capitalist system in a nutshell.

That's wild capitalism (an extreme form). There is a middle ground where it's beneficial, as in all things in life.

 

[Avro Arrow]

Oversupply is rarely a bigger problem than undersupply.

 

[Greggs]

I recently read AMD are scaling back the production of Ryzen 7000 series due to lower than expected demand.

Not a single price drop has occurred, good to see they'd rather just not produce as many to keep the price high even though no one is buying them, a price drop would have convinced me to purchase one potentially.

On a related note, when do Intel's latest and greatest release?

The Mobo and DDR5 costs must contribute, even if the CPUs were cheaper the components will take time.

 

[Greggs]

Isn't the tech industry known for boom-bust cycles as scaling production can be difficult and global demand heavily influenced by a number of (difficult to predict) factors? This particular cycle stayed in "boom" much longer from the pandemic throwing our lives into disarray around the globe.