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Electronics Production | May 16, 2006

Chip inventories beginning to grow

EETimes is talking about a correction in the semiconductor industry where the chip inventories are beginning to grow.
Industry analysts said that the chip inventories continue to surge and points towards a correction in the second half this year.

"Our analysis of inventory at semiconductor companies suggests that inventory levels are growing in both absolute and relative terms — a trend that we believe is likely to continue throughout 2006,” Andre Biggs, an analyst with the Susquehanna Financial Group, told EETimes.

“While inventory levels are far from alarming — with the potential exception of Taiwan — our thesis remains that industry output continues to be well above sustainable consumption, suggesting further inventory growth and the potential for a slowing of production in 2H '06," Biggs said in a report.

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