© franz pfluegl dreamstime.com Electronics Production | January 29, 2013
Chip inventory at Semi suppliers at worrisome high
Chip inventory held by semiconductor suppliers reached alarmingly high levels in the third quarter of 2012 amid weak market conditions, according to an IHS iSuppli Semiconductor Inventory Insider Market Brief from information and analytics provider IHS (NYSE: IHS).
Overall semiconductor revenue declined by 0.7 percent sequentially during the fourth quarter last year. The poor results came after inventory reached exceedingly high levels by the end of the third quarter in 2012, amounting to 49.3 percent of total semiconductor revenue—more elevated than at any point since the first quarter of 2006. Chip stockpiles among semiconductor suppliers had actually gone down during the final two quarters of 2011, showing a promising drawdown. But then inventories steadily ticked up again after that, reaching 47.5 percent of total revenue in the second quarter before hitting the current peak in the third—the latest time for which full figures are available. Sizing the stockpiles The inventory level being measured refers to chip stockpiles specifically in the hands of semiconductor suppliers, not to inventory throughout the electronics supply chain. Chip level at the supplier level is then compared against combined revenue from a sample of 75 semiconductor supplier companies excluding memory, which is tracked separately because of that market’s typical late results. A low inventory-to-revenue ratio is preferable, given that higher levels indicate not only unsold stockpiles but also unrealized revenue tied up with the stagnant inventory. Demand debacle “The uncomfortably high level of inventory among semiconductor manufacturers of nearly all stripes is a result of key demand drivers failing to materialize,” said Sharon Stiefel, analyst for semiconductor market intelligence at IHS. “Demand for semiconductor devices has typically come from new products that consumers feel compelled to purchase. But going into the holiday season last year, no such new products marshaled enough impetus to overcome consumer fears about lingering economic woes. Two months prior to Christmas, consumer purchases of electronics had grown by only 0.7 percent, the worst performance since 2008.” Also contributing to depressed conditions was the poor performance of the industry’s data processing segment, traditionally the largest user of semiconductors. In fact, mobile PCs were projected to decline in 2012 when final figures are tallied, toppled from dominance by media tablets. Ultrabooks and other ultrathin PCs, meanwhile, did not produce the demand for semiconductors originally expected as the year progressed. Semiconductor sectors Despite the collective rise in inventory stockpiles, some semiconductor segments performed better than others. For instance, with feature-rich smartphones and tablets taking the place of traditional PCs among consumers and eroding PC market share, the devices were anticipated to provide the strongest demand in the final quarter of 2012. As a result, semiconductor revenue for the wireless segment was expected to climb almost 4 percent. Semiconductor sectors benefiting from the tremendous growth of handsets and tablets included logic, analog and NAND flash memory, with those semiconductor channels refilling following strong shipments even into the beginning of this year. The first quarter of 2013 likely will see growth in the industrial and automotive electronics segments. Other semiconductor markets, for their part, will overcome the seasonal decline normally expected at this time of year and then start to rebound around the second and third quarters. Such assumptions, however, rest on the even larger factor of the global economy, currently a volatile variable itself with no set outcome. If global economic forecasts perform according to positive expectations, semiconductor revenue could grow by 4 percent in the second quarter and by a very solid 9 percent in the third. However, if demand evaporates, semiconductor suppliers will find themselves in a deplorable oversupply situation, which would then lead to inventory write-downs throughout the year.
Ron Jakeman of Electrolube looks back at a successful 2019 Electrolube has been growing, both in terms of its footprint and financially, for a number of years not; Ron Jakeman details the company's progress.
Etteplan and Scanfil to start strategic cooperation in joint customer projects Engineering company Etteplan and contract manufacturer Scanfil have today agreed to enter a strategic partnership in Finland.
The lovechild of ACE Production and InterSelect Carlos Bouras of Nordson Select gave us the rundown of the result of the integration and combination of ACE Production and InterSelect GmbH - the new Integra.
American Battery Metals, U.S. lawmakers convene American Battery Metals Corporation has completed a series of meetings with lawmakers and personnel in the Department of Energy and Department of the Interior in Washington, D.C., to discuss issues critical to the domestic battery production and storage industry.
Cogiscan, Critical Mfg. form strategic partnership Quebec, Canada-based Cogiscan and Critical Manufacturing, headquartered in Portugal, have forged a strategic partnership to deliver smart factory solutions for electronics manufacturers.
Collins Aerospace expanding in North Africa Collins Aerospace Systems, a unit of United Technologies Corp., has taken the first step toward the expansion of its existing site in Casablanca, Morocco.
The advantage of Vantage - Garrett Wong tells the tale Nordson Asymtek's Garrett Wong gives us a rundown of the business year and also details the Vantage Advantage
Saki’s Eddie Ichiyama details a very successful business year Eddie ichiyama from Saki gave us an update on how 2019 has been for the company and also shared some details on the recent expansion in the Czech Republic.
Sponsored content by Nordson ASYMTEKStart-to-finish conformal coating with reliability and efficiency Nordson ASYMTEK’s flexible, modular, Panorama™ S-Line delivers conformal coating process control in a space-saving footprint with overlapping line processes that minimize manufacturing floor space. This innovative, patent-pending line layout trims 50% of the line’s length by using the lower compartment in each piece of equipment for functional use. Combined with Nordson ASYMTEK’s global support, this complete conformal coating line delivers quality, product reliability, efficiency, and safety for all your conformal coating applications.
The ripple effect of Enrico Krog Iversen while being an active part in creating one of the fastest growing robotics companies in modern time might have been enough for most people, that does not seem to have slowed down a certain Danish entrepreneur.
Yamaha's Ichiro Arimoto on the business year and the company's new ventures Evertiq had the opportunity to talk to Ichiro Arimoto, General Manager of Yamaha Motor Europe, about the business year and the company's new ventures.
Mycronic, Indium forge strategic partnership Indium Corporation has announced a strategic partnership with Sweden-based Mycronic, to develop no-clean and water soluble solder pastes for jetting applications.
SCHMID delivers PlasmaLine to Hofstetter PCB SCHMID announced it has installed the company’s first PlasmaLine comprising ICP etch & sputter deposition of its Korean JV SCHMID AVACO at Hofstetter PCB AG in Switzerland.
Sponsored content by NCAB Group Benelux B.V.Failure is not an option for a PCB More than 30% of the Gerbers NCAB Group Benelux B.V. reviews, have problems. However, the PCB are integrated in key end-user product with more and more High Tech PCB. We are here to support you on the new technologies growth to maintain a high reliability and quality. Contact us to review it together.
Cobot market to reach USD 9+ billion by 2025 A new report from Tractica is forecasting continued rapid growth for the global collaborative robot (cobot) market over the next few years, reaching revenue of USD 9.7 billion by 2025.
MixComm scores USD 8+ million in series B round New Jersey-based fabless semiconductor company MixComm has secured USD 8.6 million in series B funding led by existing investor, Kairos Ventures.
SIA elects 2020 leadership The Semiconductor Industry Association (SIA) Board of Directors has elected ON Semiconductor CEO Keith Jackson as its 2020 Chair and Qorvo CEO Robert Bruggeworth as its 2020 Vice Chair.
Si wafer shipments recede for fourth straight quarter Worldwide silicon wafer area shipments slid for the fourth consecutive quarter of 2019, according to the SEMI Silicon Manufacturers Group (SMG) in its most recent quarterly analysis of the industry.
Sponsored content by SourcengineComponent Aggregators vs E-Commerce Marketplaces What is the difference between electronic component aggregators and a marketplace?
67% of a buyer’s journey is now done digitally. Learn how marketplaces emerged as full-cycle procurement platforms and challenged the traditional component aggregators.
Decline in Q4 DRAM contract prices lessens as buying momentum recovers According to the latest analysis from the DRAMeXchange research division of TrendForce, Q4 DRAM ASP is as of yet undergoing a slight QoQ decline, but this decline has shrunk down to 5%.
Technica forms growth-focused equity fund San Jose-based Technica USA has reached an agreement on an equity investment centered on future growth for the global PCB fab and assembly supplier.
IHS Markit: 5G economy in the trillions by 2035 The IHS Markit 5G Economy Study, commissioned by Qualcomm Technologies Inc., is forecasting that 5G will generate USD 13.2 trillion in sales enablement by 2035.
ZEUS Battery partnering with Kruvand Associates ZEUS Battery Products and Texas-based Kruvand Associates Inc. have come to a formal agreement on a collaboration that began in January and covers Texas, Arkansas, Oklahoma, Louisiana, New Mexico, Arizona and Mexico.
Sponsored content by EsemdaContract manufacturer Esemda opens new facility in Vilnius and expands EMS The new facility has been built with reserved space for future expansions. As Esemda constantly grows, it is of great importance to be able to rapidly increase production capacity in large volumes.
EPP with a new owner The company announces that is has found itself an ideal buyer – Photonics Systems Group – a manufacturer of micro-materials processing machines. With this takeover, PSG is strengthening is operations in the electronics industry and also laying the foundation for further growth.
Volkswagen starts pre-production e-mobility plant in China The new plant of the SAIC VOLKSWAGEN joint venture has been completed. It is purely built for the production of all electric vehicles on Volkswagen’s Modular Electric Drive Matrix (MEB).
Kongsberg Maritime divests KM Contros GmbH Following a strategic review, Kongsberg Maritime AS (KM) has decided to divest KM Contros GmbH (Contros) to AML Oceanographic Ltd. (AML).Load more news