Alarm on Semiconductor Inventory

Published:2011/2/20 21:39:00 Author:Amy From:SeekIC

According to the report of market research firm IHS iSuppli, global semiconductor inventory hits the highest level of last two and a half years during the fourth quarter of 2010. Analysts thought that if the chip industry will come into a tight corner if it lost impulse to remain growing. As we all know, overspeed production is not in keep with market rule.

At the end of the fourth quarter of 2010, semiconductor suppliers have the inventory of 83.6 days which increases 5.5 days by 7% from 78.1 days when compared to the previous quarter. The inventory used to at its highest level in the second quarter of 2008 that achieved 84 days, but after that the semiconductor industry trended downward into a downturn.

At present, the inventory level is undeniable high in every way, said the analyst at IHS. He also added, in the fourth quarter of last year, semiconductor inventory increased sharply beyond anyone’s expectation. It can be predicted that if the industry’s growth is not able to reach the expected growth in 2011, the inflated level of existed stockpile may cause difficulty for semiconductor industry.

The inventory will drop 2.5 days based on assuming that semiconductor suppliers’ revenue is up to 5.6 percentage increase compared to 2010, predicted IHS iSuppli. It will come into reality if the present inventory level keeps in manageable range.

The firm alarmed that if the chip market increases very slightly or even slips, the high level of stockpile would cause oversupply in the market, which would drive chip price downwards quickly and amplify the downturn of semiconductor market. On the other hand, some other hot segments such as smart phone and tablet PC will continue to stimulate semiconductor market, so does other segments including automobile and industry market. The related integrated circuit is MC10EL35D.

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