Cor, RE: IC inventories, here's a little info I ran across dis mornin':
"IC inventory reduction continues--at a slower pace"
By Greg Sheppard, Semiconductor Business News
February 8, 2003
URL: siliconstrategies.com
The following column was provided to SBN by Greg Sheppard, vice president of market intelligence services at iSuppli Corp., an El Segundo, Calif.-based market research firm.
Two years after the electronics supply chain was saddled with a staggering $15 billion in excess semiconductor inventory, the glut has been slashed by a factor of 10, according to preliminary research from iSuppli Corp.'s Inventory Tracker service.
Based on an assessment of the initial wave of financial results reported in January, excess inventories in the semiconductor supply chain continued to ease in the fourth quarter of 2002, iSuppli believes. Excess semiconductor inventories at chip suppliers, Electronics Manufacturing Service (EMS) providers, distributors, OEMs and retailers fell to just $1.5 billion in the fourth quarter, down 6.3 percent from $1.6 billion in the third quarter.
Inventory write downs continued during the fourth quarter, but at a reduced pace across the supply chain. Excess inventories fell by 38 percent in the third quarter of 2002, by 4 percent in the second quarter and by 33 percent in the first quarter.
The remaining excess appears to be concentrated at the semiconductor suppliers themselves, with companies in the other segments of the supply chain maintaining inventory levels that are near equilibrium. In fact, distributors, EMS providers, and OEMs are running very lean on inventories across the board, even in the telecom/networking sector, iSuppli believes.
There are some signs of a building of inventory among the electronics retailers/resellers because of a slower-than-expected holiday season, but the situation is not serious enough to cause alarm.
With demand visibility remaining foggy for all companies in the chain, prudent hand-to-mouth inventory practices continue to be the order of the day.
The major cause of inventory build up among chip companies was excess production that occurred at least through November, 2002. Almost all segments within the chip group are continuing to struggle with inflated inventories, including the PC, communications semiconductor, Programmable Logic Device (PLD), Field-Programmable Gate Array (FPGAs) and analog/power sectors.
The situation does not appear to be getting worse for the chip companies; it just isn't getting any better.
For OEMs and EMS companies, the good news is that excess production of chips has extended downward price pressure for certain product categories into the first quarter. For chip suppliers, the good news is that any uptick in demand should translate immediately into revenue because most companies
already have written off obsolete inventory.
For suppliers to chip makers, like fab equipment vendors, the bad news is that once demand picks up for their customers, a fair amount of inventory needs to be burned off before their customers' boards of directors really loosen up capital spending.
AdvocateDevil
(also, for those interested, here's a link to some commentary on current DRAM pricing: "DRAM Bulletin: 256-Mbit DDR/SDRAM price crossover looms" siliconstrategies.com ) |
