Identifying Semiconductor Supply Chain Trends With Data Science

Cutting through the noise in the semiconductor-industry supply chain can be a challenge. In the semiconductor global supply chain there are various data points that show supply and demand trends, which can be very useful for a broad market outlook. However, in order to understand the full scope of a part’s availability and pricing history it’s necessary to drill down and analyze each unique part number individually.

One of the benefits of Smith’s business model is that it provides an opportunity to map and track market trends through unique electronic-component price-and-demand data. Pairing specific algorithms that extract knowledge and insights from unstructured data across a broad range of domains is a value-add supply chain solution that Smith offers.

Operating With Open-Market Information

With nearly 40 years of industry expertise, Smith holds a wealth of Market Intelligence data. As an independent distributor, Smith views open-market activity as both a good reference for market conditions and an early indicator of trends and supply chain disruptions.

Created from changes in consumer behavior, business growth, geopolitical action, and other potentially unforeseen factors, demand is the central driving force of the semiconductor open market. The global semiconductor supply chain is made up of OEMs, contract manufacturers, and other sources and the open market delivers parts that a customer’s primary supplier has not satisfied due to the natural effects of demand trends and other supply chain disruptions. Sourcing from a broad network of qualified and trusted suppliers over the past four decades has given Smith’s data science team a wealth of historical information to compare and analyze.

Applying Market Intelligence Analysis to Data

 The inventory-correction cycle from shortage to excess that was predicted by many a year ago is in full swing now, with chipmakers, channel vendors, subcontractors, and end users all reporting heightened levels of excess chips. As market information is compiled, our global team of experienced commodity experts and market analysts assess the data to determine potential trends. The analysis our team applies to our proprietary data is a crucial part of our value-added service to our customers to help inform long-term procurement and semiconductor value chain strategies.

For example, in our latest monthly market intelligence report, we identified a list of the most sought-after product types which remained in the most demand for the last several months. Microcontrollers, power management ICs, MOSFETs, IGBTs, and almost any automotive-focused component run the highest rates of open-market shortage requests. Most of the demand for these products comes from the automotive, industrial, and medical segments.

A problem for manufacturers in these arenas is that they use many of the same ICs, or the different ICs they use share wafer starts of the same mature die nodes. Also, production runs in these electronics fields tend to be a wide variety but low volume. That means IC makers must carefully balance their production allocations in an effort to satisfy as many orders as possible without overbuilding for the more proprietary products. Pre-pandemic, this was easier for them than it is in the market’s current state, and IC manufacturers are still trying to catch up to year-old backlogs.

Benefits to Our Global Partners

 Smith’s market data analysis offers its customers potential cost-saving opportunities within the changing market cycle. The overall slowdown in the global semiconductor supply chain market, the continued efforts of chip manufacturers to cut into their backlogs, and the buildup of buffer stock created to cover sudden shortages have combined to allow some end users to recuperate profit loss from previously inflated market conditions.

Smith’s proprietary, in-house-developed part-analysis tool, creates reports with part number data that is priced much lower than the average market price. Smith’s data-science and tracking capabilities have risen to incorporate sophisticated methods for aiding our customers in forecast buys and potential cost-savings opportunities. Our data science processes can help customers compare records and reports across a variety of ranges or create completely customizable histories with our part-analysis tool. Incorporating market-intelligence information from open-market data trends helps our customers identify flexible yet long-term procurement strategies. Partnering with an independent distributor like Smith can provide the global reach, market expertise, and quality excellence needed to navigate the evolving semiconductor supply chain.