Selasa, 31 Agustus 2010

Lead Times for Docsis Modem Silicon Double

Chip fabs may be running on all cylinders now, but demand for cable modem silicon is still outstripping demand, causing vendors to fine-tune their component-ordering forecasts and possibly putting MSO inventory levels at risk later this year.
Individual Docsis modem makers declined to comment on the record, but multiple sources confirmed to Light Reading Cable that lead times for cable modem chips from Broadcom Corp. (Nasdaq: BRCM) and Texas Instruments Inc. (NYSE: TXN) are currently in the range of 24 to 30 weeks, more than double what's typical.
"You have to be extremely good about forecasting within [that longer] lead time," says an exec with one modem supplier. "There's no way of cutting those lead times down."
Another major Docsis gear supplier notes the lead time for cable modem silicon and other "critical parts" are now in the 26-week range, noting that chipmakers slowed production to match up with fluctuating economic conditions, but the current demand caught some of them by surprise. "It is creating some challenges for us," the modem maker adds.
So far, it appears that the longer lead times have yet to translate into a scarcity of Docsis devices among cable operators. Most MSOs declined to comment on the situation, but a Cox Communications Inc. spokesman replied via email that the cable operator, the country's third-largest, isn't experiencing any modem or EMTA inventory shortages.
However, a slowdown in the growth rate of cable high-speed data subscriptions may be helping to keep that situation under control. Leichtman Research Group Inc. (LRG) reported that the 19 largest cable and telco operators in the US signed on just 336,000 net high-speed Internet subs in the second quarter of 2010, the fewest of any quarter in the nine years the firm has been tracking such stats.
Jeff Heynen, directing analyst for broadband and video at Infonetics Research Inc. , says DSL consumer premises equipment (CPE) was down 14 percent in the first quarter, and down 13 percent for cable CPE.
But the inventory risk may manifest if silicon lead times don't begin to improve soon. Two cable modem vendors say this has been a problem for much of the year, but they've so far been able to predict what they've needed despite the lengthier lead times.
"If lead times continue to be that long, there will be some inventory concerns later in the year," Heynan says, noting that CPE vendors tend to get shipment "bounce" late in the year. Even if the longer lead times don't result in inventory shortages, they may cause vendors to defer revenues to future quarters if they can't complete their orders.
But broadband CPE isn't the only area being hit with the longer lead times. The same is happening with set-tops and infrastructure equipment. Among examples, scarceness of parts caused Ceton Corp. to delay shipments of its CableCARD-based InfiniTV 4 quad-tuner card multiple times. After targeting a launch in the first quarter of 2010, Ceton began shipping that product earlier this month. (See Ceton Delays CableCARD PC-TV Tuner, Ceton Plays the Waiting Game , Ceton Pitches Cable Set-Top Alternative , and Ceton Completes the Crossing .)
Broadcom declined to comment. TI, which is in the process of selling its cable modem business to Intel Corp. (Nasdaq: INTC), wouldn’t talk about specific lead times since they vary depending on the product line. (See Intel Snares TI's Cable Modem Business and What's Intel's Next Move?.)
But TI company spokeswoman Kimberly Morgan says TI has been taking steps to ratchet up its chipmaking capacity so it can respond to the ebbs and flows of the market. In fact, it's been investing in capacity while others closed fabs.
Among some recent moves, TI added capacity in July by purchasing two wafer fabs and manufacturing equipment located in Aizu-Wakamatsu, Japan, and has hired more than 400 additional testers between the second quarter of 2009 and the second quarter of 2010. In early 2009, it opened a 800,000-square-foot assembly-and-test facility in the Philippines, and installed nearly 200 additional manufacturing tools in its 200-mm wafer fabs in Dallas; Friesing, Germany; and Miho, Japan.
Morgan says those moves have helped to improve lead times, but acknowledges that more work needs to be done to close the gap. "They're still longer than we like, but customers are seeing improvements. We're not seeing any signs of abatement in terms of customer demand."
But to demonstrate how schizophrenic the market is these days, Intel just slashed its revenue forecast late last week, citing a weaker-than-expected PC market.
Although chip demand has translated to longer lead times for Broadcom and TI, Microtune Inc. (Nasdaq: TUNE), which makes silicon tuners for Docsis modems, says it's been business as usual.
"We haven’t seen any supply problems at all yet," says Carey Ritchey, VP and GM of Microtune's cable business, which works with three primary suppliers -- IBM Corp. (NYSE: IBM), Jazz Semiconductor , and X-Fab -- and tends to forecast its needs four to five quarters out.
He says Microtune has been able to maintain a generally acceptable 13-week lead time for its customers, with larger customers typically getting even shorter lead times.

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