Mixed-signal chip makers believe most inventories will have cleared by the end of the coming quarter and customers will start to place larger orders rather than the 'turns fills' that have dominated since last year.
But the shift is likely to extend lead times from extremely low levels today to a point where backlog orders will be needed to guarantee regular supplies.
The trend emerged in a series of analyst briefings given recently by semiconductor firms.
Robert Swanson, chairman and CEO of Linear Technology, told the markets: "Customers have little incentive [to book ahead now] because they know they can get product right away. We have plenty of inventory so we can get product out to them pretty quickly."
Separately, Rick Crowley, chief financial officer of Micrel, said: "With extremely low lead times, customers believe components to be readily available. Over 95% of new orders for standard product [in Q4] had a required delivery date of within 90 days. Lead times will begin to push out at end of Q1, the beginning of Q2.
"Low backlog and short lead times lead to highly limited visibility. Without substantial backlog, you don't know what products will be ordered."
Jack Gifford, chairman, president and CEO of Maxim Integrated Products, says 90% of its current orders are to ship in this quarter or the next.
Maxim has planned to avoid the supply hiccups of two years ago and secured extra capacity by moving from 150 to 200mm wafer production at two fabs. "We are capable of shipping $300m to $400m more per quarter," Gifford said.
Linear has decided to build more inventory for when demand picks up and it recently shifted production to a 200mm line.
Crowley says that Micrel expects its inventories to increase.
Nigel Toon, vice-president and general manager of Altera Europe, told EETimes: "With some of the commodity products, there will be some spot shortages because of the lack of visibility."
Malcolm Penn, CEO of analyst Future Horizons, says the supply- driven market could lead to component orders rising too far above consumption rates again.
"When demand falls off a cliff, the industry will always de-stock more than it needs," he said. "Once supplies become a little bit tight, then [customers] start ordering more than the run rate and the demand spirals up again."
