US Semiconductors: 2Q Analog Market Update: Industrial Upcycle In Full Swing

Research evidence excerpt

US Semiconductors: 2Q Analog Market Update: Industrial Upcycle In Full Swing

ey (>Access Dataset), 2) the UBS Evidence Lab

distributor inventory monitor with SKU-by-SKU detail on $14B and 48B units of catalog

parts at 100+ distributors (> Access Dataset), and 3) our financial statement deep dive

into the inventory cycle through the lens of analog company balance sheets.

Our B2B survey shows that demand accelerated quite strongly for both distributors and

direct buyers (Figure 15Distributors'anddirectbuyerstrailingdemandcontinuestoacelerate, Figure 16Expectedchangeinoveraldemandovernext6monthsistrendinghigherfordistributorsanddirectbuyers), building upon strength exhibited in our previous

1Q survey. Data Centers and Industrial held their already quite strong level (Figure 21DemandsignalsflatishinDCandIndustrials,slightlylowerinremainingverticals) -

in line with commentary exhibited from analog earnings and recent conference circuit.

Lead times rose over the past six months, and buyers expect them to rise further over the

next six months (Figure 33Averageleadtimesvs6monthsagoincreasingwhilefutureexpectationsunchanged), a typical early-upcycle pattern as supply starts to tighten.

Regarding supply, respondents indicate supply availability declining and remain overall

concerned over shortages in the next six months (Figure 32Bothdistributorsanddirectbuyersdemonstrateconcernoversuplyshortagesinnext6months). Finally, we note pricing

looks to be a tailwind for analog companies in the near term as customers are seeing

price increases more in 2Q than in 1Q (Figure 36Pricingtrendinghigher,including6monthforwardexpectations).

The Distributor Inventory Monitor saw ASP pricing steady Q/Q in both True Analog

and Power Analog after a strong 1Q, while MCU was +13% and discretes +11%.