What's going on with Microchip?
From: Tsvetan Usunov (tusunov_at_my-deja.com)
Date: 01/22/04
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Date: 21 Jan 2004 22:40:00 -0800
I just received this letter from our microchip's distributor. it seems
they will lost their one advantage amoung other uC manufacturers -
their uC were always available in stock or 3-4 weeks.
Any comments? Did you get the same letter?
Best regards
Tsvetan
---letter---
Dear Customer, December 15, 2003
About 2 months ago I wrote a letter to you that was also posted on
Microchip's
web-site informing you that the semiconductor industry is going
through an up-cycle. I advised you that because of a strong demand
environment there is a risk of longer lead-times.
Because of that risk I requested all our customers to review their
requirements and place an order with Microchip for up to 12 weeks of
your product consumption. Many of you listened to that genuine request
and acted accordingly, and I want to thank you for helping us help
you. For the rest of our customers who have not responded to my
request, I make that request again. Please review your needs and place
an order with Microchip for the next 8 to 12 weeks of your
requirements. For most of our products the lead-time is 3 weeks, so
many of the products are still available for your manufacturing needs
in January 2004 and beyond.
Many of the customers that did not respond to my request a couple of
months ago
are now finding it difficult to live with even 3 to 4 week lead-times.
We are bombarded with expedite requests from such customers. It is
hurting our productivity as it costs more to expedite. Therefore,
starting January 1, 2004 Microchip will be instituting a new policy to
manage the demand in this environment. Microchip will charge a 20%
expedite charge for improving the delivery performance from our
published lead-times. The lead-times
themselves are a moving target because they are demand dependent.
Therefore, to
create a comfort zone for the customers, we will not charge an
expedite fee as long as the requested delivery date is more than 8
weeks beyond the date ordered.
We feel that this policy is fair for everyone. The customers who are
unable to
plan their requirements should bear the extra charge of expedites
instead of being subsidized by those customers that are placing their
orders well ahead of time. I request again that you review your
requirements and place an order with Microchip for at least 8 weeks of
your production needs.
We are continuing to add capacity in all areas of our business. We
feel that we
will be able to maintain lead-times in the range of 4 to 6 weeks.
However, lead-times are always product mix sensitive. By getting
visibility of your requirements, we will be better able to build
product in exact mix and maximize our capacity.
Once again, I would like to thank you for your business.
With best regards,
Steve Sanghi
President and CEO
Microchip Technology Inc.
---end letter---
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