SAN JOSE, Calif. – Amid a possible disruption in supply for microcontrollers (MCUs), Microchip Technology Inc. says that it can take up the slack.
, MCU rival Renesas Electronics Corp. has been hit hard by the quake. Renesas, the world's leading maker of microcontrollers that was hit hard by the Japan earthquake of March 11, is in talks about outsourcing the production of automotive microcontrollers to Globalfoundries Inc., according to reports
Last week, Microchip issued a letter, saying that its fabs have not been impacted by the quake. ''We have confirmation that there are no disruptions to our supply line,'' said Steve Sanghi, president and CEO of Microchip, in the letter. ''Also, our supply of packaging raw materials comes from locations outside of Japan.’’
Sanghi also said the company can pick up the MCU slack in the supply chain. ''We have already received a barrage of inquiries from customers in need of a quick ‘replacement’ for several non-Microchip microcontrollers that they had in production,’’ he said. ''Some of these microcontrollers can be replaced very quickly with Microchip’s PIC microcontrollers, while others would require a bit of redesign effort.’’
To meet potential demand, Microchip is expanding production within its fab in Gresham, Ore. ''We have already initiated the ramp of our fab, assembly and test facilities to produce more supply of our products,’’ he said.
''Now, here is the challenge. Recently, the lead times of Microchip’s products have come down and, as a result, many customers have only placed near-term backlog. Before we commit our availability to competitors’ customers who are stranded, we would like to ensure that our current customers are taken care of. Despite zero disruptions in our supply line today, the circumstances are changing every day. Some allocations of Microchip’s raw materials could develop in the near future, if Microchip’s Japanese suppliers start to allocate the output of their unaffected facilities. This fear of raw-material allocation, together with significant demand from our competitors’ stranded customers, is likely to take the lead times of Microchip’s products back out,'' he said.
''So, here is a call to action for all of Microchip’s existing customers. Please make sure that you immediately review your needs and place an order for no less than 12 weeks of your requirements. I have issued similar calls before,’’ he said.
''History bears out that those who heeded my requests were better off, while the others had to pay expedite charges or suffer delays in product delivery. I am expecting a huge surge of redesign inquiries, as system manufacturers move to rescue their microcontroller and analog product supplies,’’ he said. ''Therefore, our existing customers should get in line first. We work from backlog, and those who commit backlog to us secure the supply first. In a couple of weeks, we will look at the availability above backlog and start committing that to stranded customers looking for substitutions.’’