According to supply chain, ON Semiconductor issued a price increase notice to its customers and distribution partners in mid-May that it will increase prices on July 10, 2021.
ON Semiconductor mentioned in the notice that in the past 12 months, ON Semiconductor has increased its manufacturing capacity to meet unprecedented customer demand. Although they maintain the momentum of increasing supply, they are still encountering challenges and disruptions in the global supply chain. As they continue to see customer orders higher than the historical run rate, forecasted volumes into 2022 for certain product portfolios, the current surge in demand poses ongoing challenges for ON Semiconductor.
ON Semiconductor stated that it will take some actions to further ensure the stability of the supply chain to meet customer needs.
- Implement further targeted price increase, as necessary, in the most negatively impacted portfolios. Price change will be reflected in the Q3 2021 pricing cycle, which will become effective on July 10, 2021 as planned.
- Firm order windows will be changed to 120 calendar days before current MRSD for all products, effective June 15, 2021. This means no order cancellation or order change inside 120 calendar days of current MRSD.
- Negotiated Non-Cancellable Orders (NNCO) will be utilized, as necessary, where MRSD is outside of the firm window.
At the end of the notice, ON Semiconductor recommended that its partners review and adjust the backlog and forecast with customers, to ensure that the customer requested dates align with production schedules before June 15, 2021.