According to the latest report, a source at an IC design company in Taiwan revealed that the price of analog chips is expected to continue to rise, but at a slower pace, while supply constraints remain.
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The sources pointed out that lead times for analog IDM vendors are still as long as 52 weeks, although the overall shortage of analog ICs is not as severe as in 2021. IDMs are looking to build additional fab capacity and work closely with pure-play foundries, but so far these efforts have not been enough to meet demand.
Moreover, limited expansion space in 8-inch fabs around the world is another key reason why analog IC supply remains tight, sources said. For Taiwanese analog IC suppliers that rely on 8-inch fab manufacturing for cost reasons, they want IDMs to increase capacity at 12-inch fabs to help ease capacity constraints at 8-inch fabs, sources said.
Furthermore, IDM manufacturers intend to focus more on automotive and industrial applications, so focus on the expansion of 12-inch fabs. Sources pointed out that some Taiwanese analog IC companies believe that despite the supply constraints, the increasing uncertainty of demand for consumer electronic devices, mainly their target applications, is the best case for maintaining their prices.
The addition of 12-inch fab capacity by IDMs may ease supply constraints faced by analog chip suppliers in Taiwan, as more 8-inch fab capacity will be used for their cost-sensitive products, the sources said.
