Shrinking leadtimes

The fact that leadtimes for most electronic components continue to shrink rapidly indicates that supply is still strong despite efforts by suppliers to reduce production after inventory levels grew.

The average leadtimes for 30 of the 41 items tracked monthly by Purchasing magazine (including

most memory IC types) shrunk in October. For example, delivery times for 16 megabit (Mb) flash memory fell from 16.5 weeks in September to 9.8 weeks in October. Sixteen megabit DRAM leadtimes retreated from 11.4 weeks to 5.8 weeks and 64 Mb DRAMs shrunk from 9.2 weeks to 6 weeks. The only memory chip leadtime that expanded was 8 Mb flash which went from 8.6 weeks to 10.1 weeks.

Leadtimes have been volatile for most of 2004 because component demand has been uneven. However, demand is likely to stabilize over the next several months since.

Long-term, leadtimes will likely shrink in the first half of the year. Many analysts forecast slower growth for the electronics industry in 2006, which means weaker component demand.