The supply of eMMC storage devices has been constrained by shortages of related memory chips and components so far in 2021, affecting negatively shipments of entry-level and mid-range handsets, according to industry sources.
Suppliers of DDR3, NOR and SLC NAND flash memory chips have been troubled by insufficient production capacity, resulting in handset and other end-market device supply constraints. The situation is expected to persist throughout this year, the sources said.
Foundries have also seen their mature process manufacturing capacity fall short of demand, constraining the supply of related chips and components such as flash device controllers, the sources indicated. Controller chips for use in eMMC and SATA storage devices are manufactured using mainly 40nm and 55nm processes.
Despite more controller suppliers transitioning to 28nm process manufacturing for their mainstream products, the overall supply of 28nm process manufacturing remains limited as other chips such as CMOS image sensors are also built using 28nm process, the sources said.
As a result, the worsening shortage of eMMC devices has made disruptions to the handset industry supply chain particularly the entry-level and mid-range segment, according to the sources.
A global shortage of semiconductors has been encouraging downstream system makers and brand vendors to build up inventory. Despite a recent slowdown in end-market demand, the ongoing shortage of chips and components, which varies from segment to segment, will still prompt those terminal vendors to stockpile, the sources noted.
Amid a global chip shortage, companies are unlikely to give up the available production capacity they have already secured, according to Pei-Ming Chen, president for specialty DRAM and flash chipmaker Winbond Electronics. Once someone cuts back orders, Chen continued, others will quickly fill the capacity left vacant.
Demand deceleration in India due to a resurgence of COVID-19 infections locally may have an adverse impact on certain IC industry sectors, Chen said. However, the overall demand looks promising as the US economy is recovering from the pandemic, Chen continued. Suppliers in general remain positive about maintaining their inventory at high levels, according to Chen.
Winbond has as yet seen no sign of terminal customers cutting back orders, Chen noted.
Concerns have also been raised about an "uneven" distribution of available chips and components facing downstream device makers and brand vendors, as shortages of diverse chips and components are in varying degrees, according to industry observers.
