US Acts On Chip Hoarding


Washington has mandated November 8th as the date when chip companies must answer a series of questions including information on inventories, production capacity and  key customers  for specific products.

The questionnaire was posted on the Federal Register and these are the questions it asks:

The Department is specifically seeking the following information and data:

1. For semiconductor product design, front and back-end manufacturers and microelectronics assemblers, and their suppliers and distributors:

a. Identify your company’s role in the semiconductor product supply chain.

b. Indicate the technology nodes (in nanometers), semiconductor material types, and device types that this organization is capable of providing (design and/or manufacture).

c. For any integrated circuits you produce—whether fabricated at your own facilities or elsewhere—identify the primary integrated circuit type, product type, relevant technology nodes (in nanometers), and actuals or estimates of annual sales for the years 2019, 2020, and 2021 based on anticipated end use.

d. For the semiconductor products that your organization sells, identify those with the largest order backlog. Then for the total and for each product, identify the product attributes, sales in the past month, and location of fabrication and package/assembly.

i. List each product’s top three current customers and the estimated percentage of that product’s sales accounted for by each customer.

e. For each phase of the production process, identify whether your organization carries out the step internally or externally. For your organization’s top semiconductor products, estimate each product’s (a) 2019 lead time and (b) current lead time (in days), both overall and for each phase of the production process. Provide an explanation of any current delays or bottlenecks.

f. For your organization’s top semiconductor products, list each product’s typical and current inventory (in days), for finished product, in-progress product, and inbound product. Provide an explanation for any changes in inventory practices.

g. What are the primary disruptions or bottlenecks that have affected your ability to provide products to customers in the last year?

h. What is your organization’s book-to-bill ratio for the past three years? Explain any changes.

i. If the demand for your products exceeds your capacity, what is the primary method by which your organization allocates the available supply?

j. Does your organization have available capacity? If yes, what is preventing the filling of that capacity?

k. Is your organization considering increasing its capacity? If yes, in what ways, over what timeframe, and what impediments exist to such an increase? What factors does your organization consider when evaluating whether to increase capacity?

l. Has your organization changed its material and/or equipment purchasing levels or practices in the past three years?

m. What single change (and to which portion of the supply chain) would most significantly increase your ability to supply semiconductor products in the next six months?

2. Questions for intermediate users and end users of semiconductor products or integrated circuits:

a. Identify your type of business and the types of products you sell.

b. What are the (general) applications for the semiconductor products and integrated circuits that you purchase?

c. For the semiconductor products that your organization purchases, identify those that present the greatest challenge for your organization to acquire. Then for each product, identify the product attributes and purchases in 2019 and 2021, as well as average monthly orders in 2021. Then estimate the quantity of each product your organization would purchase in the next six months barring any production constraints as well as the amount your organization expects to actually be able to purchase. For each of your organization’s top semiconductor products, estimate each product’s lead times and your organization’s inventory for (a) 2019 and (b) currently (in days). Provide an explanation of any current delays or bottlenecks.

d. What are the primary disruptions or bottlenecks that have affected your ability to provide products to customers in the last year?

e. Is your organization limiting production due to lack of available semiconductors? Explain.

f. What percentage of your current production has your organization had to defer, delay, reject, or suspend in the past year? Explain.

g. Is your organization considering or carrying out new investments to mitigate semiconductor sourcing difficulties? Explain.

h. What semiconductor product types are most in short supply and by what estimated percentage relative to your demand? What is your view of the root cause?

i. Has your organization changed its material and/or equipment purchasing levels or practices in the past three years?

j. What single change (and to which portion of the supply chain) would most significantly increase your ability to purchase semiconductors in the next six months?

k. What percentage of your orders are fulfilled by distributors versus through direct purchase orders to semiconductor product manufacturers?

l. For the semiconductor products your organization purchases, how long (in months) are the typical purchase commitments? How, if at all, do your organization’s purchase commitments differ for products in short supply?

m. Has your organization faced “de-commits” (defined as a notification from a supplier that expected or committed supply will not be delivered in the agreed-upon time and quantity) in recent months? If this is a significant issue, please explain ( e.g., nature of product, supplier, impact).

The questionnaire is causing some difficulties for companies who 

are reluctant to share customer confidential information with the US government.

“We will definitely not leak our company’s sensitive information, especially that related to our customers,” says Sylvia Fang, TSMC’s general counsel.

TSMC Chairman Mark Liu recently stated that “there are people definitely accumulating chips who-knows-where in the supply chain”.





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