Report: Semi Inventory Continues to Climb in Q2
EL SEGUNDO, CA – The total stockpile level for all semiconductor suppliers – excluding the volatile memory segment – is projected to rise to 81.5 days in the second quarter, up 1.5% sequentially, says IHS iSuppli. With this increase, inventories will have risen during every quarter since the last three months of 2009.
Inventories throughout the electronics supply chain during the first quarter – including at semiconductor suppliers, distributors, contract manufacturers and original equipment manufacturers – rose for all sectors except computer makers. Computer OEM stockpiles declined more than 8%, likely because they shipped most of their products to retail outlets for restocking following the busy holiday season in the fourth quarter of 2010, according to IHS iSuppli.
In comparison, memory and analog companies had the highest percentage increases in their internal inventory, with growth of almost 15%, while fabless companies and distributors experienced more muted increases.
Semiconductor inventories are expected to continue rising throughout 2011. Growth will be stimulated by market demand for popular consumer items like smartphones and tablets, as well as for perennial reliables such as PCs, the firm notes.
The Japan quake disaster in March will have a minimal effect on inventories throughout the electronics supply chain, given that inventories had been built up during the prior two quarters, IHS research shows. In fact, a more widespread disruption that had threatened to unfold was held at bay by opportune supplies on hand, the timely repair and restart of production facilities, and agile moves among manufacturers to shift production from Japan to facilities outside the country.
One continuing area of concern might be the supply of raw wafers because Japan provides approximately 60% of the global supply of semiconductor wafers. However, in a positive indicator, leading semiconductor foundry Taiwan Semiconductor Manufacturing Co. announced it will not experience any detrimental effects from the aftermath of the disaster.
Manufacturers may still increase orders as a cushion in light of the recent turbulence to guard against future supply chain disruptions. Maintaining higher inventory could become the new normal in the future, a calculated measure deployed to mitigate the disrupting effects of natural disasters and political upheavals, according to IHS iSuppli.
