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© Elmos Electronics Production | August 25, 2010

Chip inventories on the rise

Chip suppliers are reporting rising inventory. However, the swelling stockpiles do not represent a cause for concern in the industry at present with demand expected to increase during the coming months, said market researcher iSuppli.
Midway through the second-quarter reporting period, total chip inventory among the approximately 35 semiconductor component manufacturers tracked by iSuppli climbed to USD 9.6 billion, up a strong 9% from the 1Q/2010 (USD 8.9 billion). Likewise, average Days of Inventory (DOI) grew, increasing by about 4 days during the period to 73.2 days (1Q/2010: 69.3 days).

The attached figure shows iSuppli’s forecast of semiconductor inventory value—both in dollar terms and in DOI— starting from the first quarter of 2008 up to the second quarter of 2010.


This chart has a zoom-function.

Overall, however, the increase in inventory reflects a justifiable build, and the market researcher is not concerned over an inventory bubble. And with the market now less volatile, semiconductor companies gradually will be returning to more normal operating conditions and inventory levels over the next few quarters, iSuppli believes.

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