Semiconductor Lead Times Surge Across Multiple Segments, Baird Reports

MOSFET lead times have reached 25 weeks on average (highest since July 2024), with specific stretches at Diodes (37 weeks), Vishay (31 weeks) and Onsemi MOSFETs (26 weeks). DC-to-DC conversion from MPS is at 33 weeks, Xilinx FPGA lead times are 40 weeks, and DRAM (mobile LPDDR5 and DDR5) are at 41 weeks — the highest in Baird's dataset. Several discrete and SiC products are also elongated (Diodes discrete 26 weeks; Onsemi SiC 24 weeks), while data conversion and amplifier lead times remain stable at 17 and 13 weeks. Baird says it remains constructive on cyclical semiconductor companies, implying potential upside for sector participants as the upcycle accelerates.

Analysis

Supply tightness in power discretes and power-management ICs has created a near-term pricing and allocation regime that favors specialized, fast-to-market vendors over commoditized suppliers. Expect revenue upside to show up as higher ASPs and rationed shipments rather than sudden volume growth, which means margin beats will precede durable unit growth by one to three quarters.

A subtle but important second-order effect is acceleration of OEM design choices: customers under allocation bias toward single-vendor BOM consolidation and higher-integration PMICs to reduce multi-sourcing logistics. That dynamic should disproportionately benefit firms with broad analog portfolios and strong design-in engines, while increasing switching costs for OEMs and lengthening customer lifetime value metrics.

Key reversal risks sit in two buckets: demand normalization (a single-quarter drop in book-to-bill would compress the stretched order pipeline quickly) and visible capacity additions or GaN/SiC substitution over the next 12–24 months that reduce supplier pricing power. Monitor distributor inventory days, OEM order cancellations, and wafer fab utilization as leading indicators; a persistent drop in any of these within 60–90 days would flip the thesis.

Key Decisions for Investors

• Long MPWR (Monolithic Power Systems) — allocate 2–4% portfolio position in stock for a 6–12 month horizon. Target +30–40% upside as ASP strength and design-win cadence convert to revenue; hard stop -15% (or hedge with 6–9 month puts) to limit downside from demand shock or competitive price pressure.
• Long DIOD (Diodes Incorporated) — 1.5–3% stock position or buy a 6–9 month call spread to limit premium outlay. Target +35–45% on margin expansion and distributor-driven pricing; protect with a -18% stop or sell a portion on a 20% rally to lock profits.
• Options hedge / asymmetric play — buy 12–18 month LEAP calls on MPWR (small position ~1% notional) rather than outright leverage, capturing multi-quarter re-rating if allocation persists while capping downside to premium. Aim for 3x+ payoff if the supply tightness continues into next year.
• Risk-managed pair (if available): long DIOD / short a broad, inventory-heavy semiconductor name or ETF exposure to cyclicality (size relative exposures 1:0.5) — this isolates pricing/margin vs. pure volume cyclic risk. Close pair if book-to-bill falls below 0.95 or distributor inventory days rise by >10% QoQ.