ADI、Silicon Labs announced price increasing

On November 1, ADI and Silicon Labs successively issued the latest price increase letters. Two price increase letters circulated in the industry show that ADI and Silicon Labs have notified customers that they will increase on December 5 and November 28, respectively.

 

Among them, the ADI price increase letter shows: "We have experienced cost increases in all aspects of the supply chain, such as wafer manufacturing costs have increased significantly. We have tried to minimize the impact of these increased costs on customers, but we are now Some of these costs must be reflected in pricing. We are now informing you that additional price increases may affect some of the parts you purchase through distribution partners."

 

ADI said that it will increase the prices of some products in ADI and its Maxim product portfolio. The specific increase has not been disclosed, and the price increase will be implemented from December 5, 2021. For Maxim products that are not affected by additional price increases, the previously communicated 6% price increase plan will continue to be implemented.

 

 

 

As for Silicon Labs, its price increase letter shows that Silicon Labs will increase the pricing of all its product lines starting from November 28, 2021, including existing backlog product orders. The specific increase was not disclosed in the price increase letter.

 

Regarding the reason for the price increase, Silicon Labs stated in the price increase letter: "The semiconductor supply chain crisis continues to seriously affect industries around the world, and there is no sign of recovery in the short term. This crisis highlights the urgent need to invest in semiconductor capacity expansion to meet the needs of the global economy. Continued growing demand.Silicon Labs is working hard to meet current demand and achieve meaningful capacity expansion through all levels of the supply chain as soon as possible.Due to the capacity crisis across the industry and the inflation that has occurred in nearly all industries, we are (Raw materials, foundry, test and assembly, logistics, labor/wages) are seeing unprecedented cost increases.” As a result, Silicon Labs will decide to increase pricing across all product lines to reflect costs.

 

At the same time, Silicon Labs also stated, "We recognize that it is disruptive to pass on the cost increases we have seen to our customers. As inflation and shortages in the supply chain ease, we will work hard to find and pass on cost reductions."

 

 

 

It is worth noting that on the same day, news broke out in the supply chain that the supply of WiFi chips was in short supply. MediaTek raised product prices by 20% in October, and another major manufacturer, Realtek, may follow suit next year. In this regard, MediaTek stated that it does not comment on the price.

 

As we all know, MediaTek has benefited from the accelerated penetration of 5G and WiFi 6, as well as the launch of new products such as client smart devices, wireless Bluetooth headsets, and tablet computers. MediaTek has revised its annual revenue forecast upwards for the second time. Recently, due to work from home, home study, and long-distance video communication, the market demand for WiFi has been greatly expanded, and the chip usage is strong, which has also greatly increased the demand for related chips of MediaTek.

 

The Realtek WiFi product line accounted for 30% of the overall revenue, making it the largest product. Realtek believes that the current market demand for WiFi 6 is still strong. It is optimistic that the penetration rate of WiFi 6 in the PC market will reach 30% this year, and the router market penetration rate will reach 20%, which will further double next year. The company’s WiFi 6E customer case is already in progress. It will gradually increase in volume next year.

 

According to supply chain analysis, the price increase of Netcom chips is mainly due to insufficient production capacity of mature manufacturing processes, resulting in a slower supply of WiFi chips than the market needs. Looking at Broadcom, the world's leading chip manufacturer for Internet communications, the current delivery period is as long as 52 weeks, and the price has been raised by more than 20% for this reason; coupled with frequent increases in foundry prices, MediaTek has raised the price of WiFi 6 chips this quarter. About 20% to 30%; Realtek once again reported the cost to customers in October, which increased by 10% to 15%, and the cumulative increase this year has been at least 50%.