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18 February 2011 ,
Written by Dhruv Tanwar
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Research by IHS iSuppli has said that inventories held by semiconductor suppliers have surged to their highest level in two-and-a-half years during Q4 2010, which could be troublesome if chip industry growth loses steam.
The firm said suppliers had 83.6 days of inventory (DOI) at the close of Q4 2010, up 5.5 days or 7 percent, from 78.1 days in the previous quarter. This marks the highest levels of inventory since the second quarter of 2008, right before the onset of the last semiconductor downturn, which was marked by 84 days DOI.
Sharon Stiefel, analyst, semiconductor market intelligence, at IHS said this level of inventory could be a concern “if semiconductor industry growth falls short of expectations in 2011.” IHS iSuppli had earlier forecast stockpiles to decrease by 2.5 DOI during the fourth quarter. The firm predicted 5.6 percent revenue growth in 2011 basis its current semiconductor forecast, adding that the present surge in inventories should be manageable if its forecast held, though a faster-than-normal decline would be evident because of oversupply if growth is lower.
Segments such as smart phones and media tablets are presently drivers of strong growth for semiconductors, even as other less visible segments such as automotive and industrial also add to the sales tally. |