(Bloomberg) -- Chip-starved industries from automakers to consumer electronics will need to wait a bit longer for components, as delays in filling orders continue to get worse.Chip lead times, the gap between ordering a semiconductor and taking delivery, increased by seven days to 18 weeks in May from the previous month, an indication that chipmakers’ struggles to keep up with demand are worsening, according to research by Susquehanna Financial Group. That gap, already the longest wait time since the firm began tracking the data in 2017, is now more than four weeks longer than the previous peak in 2018.Investors watch lead times looking for clues about how demand is trending, but also as sign that chip users may be panicking and ordering too much, which would mean the industry is headed for a glut. Susquehanna analyst Chris Rolland said that point has already passed and he’s concerned there isn’t enough demand for the end devices that rely on the electronic components to support current ordering levels.
While overall lead times stretched for companies such as Broadcom Inc., NXP Semiconductors NV., STMicroelectronics NV and Texas Instruments Inc., some areas are beginning to catch up with demand. Microcontrollers, small processors that direct functions in everything from cars to washing machines, saw their lead times decrease by more than a week, Rolland wrote. Lead times for analog chips, devices that convert real-world phenomena such as touch and sound into electronic signals, increased, but at a slower pace than previously, according to Susquehanna.
Shortages of semiconductors have been felt the most in the automotive industry, which is forecast to lose more than $100 billion in sales of vehicles it can’t make. Other areas have felt the pinch, too, with many electronics makers, including the biggest companies such as Apple Inc., unable to meet all of the demand for their products.Some leaders at chipmakers, such as Broadcom Chief Executive Officer Hock Tan, have cautioned against reading too much into the spike in lead times. They’ve argued that the lengthening period is evidence of a higher level of understanding of the semiconductor industry by their customers and new willingness to commit to long-term supply agreements that can’t be canceled.
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