Electronics Production | January 10, 2007
Excess Chip Inventory Keeps Growing
Surplus semiconductor inventories in the global electronics supply chain rose again in the fourth quarter of 2006, meaning that excess stockpiles are likely to linger through 2007, iSuppli Corp. predicts.
Total excess chip inventory swelled to $4.3 billion in the fourth quarter, up 4.9 percent from $4.1 billion at the end of the third quarter, according to a preliminary estimate from iSuppli. "The 4.9 percent increase in excess semiconductor stockpiles conforms to iSuppli's forecast, and does not mark a significant worsening of the surplus inventory situation," said Rosemary Farrell, analyst with iSuppli. "While rising levels of excess inventory are a concern for the global semiconductor industry in 2007, they are not sufficient to derail market growth." Although $4.3 billion appears to be a worrying total, the impact of the overage on the semiconductor industry will not be that great in 2007. If the excess inventory were taken out of the equation, the semiconductor market would experience only a 1 to 2 percentage point increase in growth in 2007 compared to iSuppli's present forecast of a 10.6 percent expansion in global chip sales for the year. However, indications of rising inventory come amid signs of the start of a seasonal slowdown for the semiconductor market and the larger electronics industry. Chip suppliers in the fourth quarter experienced slowing orders for semiconductors for 3G wireless handsets and for high-end computers, adding to weakness already seen in some segments of the networking and wired communications segment. Furthermore, overproduction of LCD televisions added to excess stockpiles of related chips during the quarter. In light of these trends, some semiconductor suppliers have trimmed their guidance for their fourth-quarter results. Semiconductor suppliers in the fourth quarter typically reduce their Days of Inventory (DOI) by a larger margin than they do in the third quarter. After entering the third quarter of 2006 with elevated DOI, semiconductor suppliers reduced their DOI by less than a day in the third quarter. This slight decrease of inventory fell short of the five-year average of nearly two days of reduction in DOI among semiconductor suppliers in the third quarter. While most of the excess stockpiles are concentrated at the semiconductor suppliers, there are signs of worsening inventory levels at Electronics Manufacturing Services (EMS) providers. EMS inventory remains bloated and some will be pushed back to semiconductor suppliers. DOI at component distributors is stable. Despite this, iSuppli believes that the current inventory situation is not a cause for major concern. Although some semiconductor suppliers reduced their guidance, the negatives are offset by positive results at other companies. The fact that DOI at semiconductor suppliers are on track to decline at a lower-than-normal rate is not unexpected. This is due to the slowing of demand from some end markets, as well as inventory adjustments among chip customers.
U.S. polysilicon makers laud Phase 1 of China deal The United States’ three remaining manufacturers of polysilicon expressed appreciation to President Trump and praised U.S. negotiators for securing the Chinese commitment to purchase U.S. polysilicon in the first phase of the U.S.-China trade deal.
Dupont explores divestiture of electronics unit Following its recent USD 26.2 billion deal to sell off its nutrition business, DuPont de Nemours Inc. is weighing a divestiture of its electronics unit, according to people familiar with the matter.
AMD bolsters exec leadership team AMD has announced several promotions and one new hire to its senior leadership team, in an effort to enable the company’s continued growth in the high-performance computing, graphics and visualization technologies market.
Webasto opens new battery centre in Jiaxing Webasto has inaugurated its new roof plant and battery center in Jiaxing (Zhejiang Province) close to Shanghai.
Panasonic to expand its manufacturing footprint in India Panasonic is looking to build a new wiring device factory in southern India. The new factory is scheduled to start production in autumn 2021, responding to the increased demand in the country.
Season Group strengthens wireless R&D & manufacturing capability Season Group has invested in, and installed, two high-speed and high-precision wireless communication testers - Rohde & Schwarz’s R&S CMW500 Wideband Radio Communication Tester and R&S CMW100 Communications Manufacturing Test Set.
Rocket Lab expands capabilities in So Cal Rocket Lab announced this week it will open a new facility to serve as its corporate headquarters and provide increased production capacity.
PCB Piezotronics unveils new clean rooms PCB Piezotronics Inc., a wholly owned subsidiary of MTS Systems Corporation, has announced the completion of environmentally controlled clean rooms at their DePew, New York facility.
European loudspeaker company brings production back home Difficulties manufacturing smaller design series among reasons for the decision to return back to base.
China only region to register pure-play foundry market growth Rise of China-based fabless IC suppliers offers increased opportunities for foundries, IC Insights states in a recent report.
Mycronic receives first SLX order Swedish production equipment specialist, Mycronic, has recieved their very first order of its mask writer SLX.
600 new German jobs as VARTA expands production again The lithium-ion battery market continues to experiencing growth, currently the market is poised to continue to move forward with an annual growth of about 30% – and VARTA wants a big piece of the pie.
FTG achieves S9100D certification at acquired PCB fab Firan Technology Group Corporation has completed and received AS9100D Certification from SAI Global Ltd. for its recently acquired PCB manufacturing facility located in Fredericksburg, Virginia USA (formerly Colonial Circuits Inc.).
Dutch block sale of technology, China miffed Following ASML’s denial of an export license by the Dutch government to sell a piece of critical chip-making technology to the Chinese, China’s ambassador to the Netherlands has issued a statement expressing his country’s displeasure.
DuPont aids S. Korea in photoresist shortage The office of Korea’s Ministry of Trade, Industry, Sung Yun-mo, met with DuPont President Jon Kemp last week to confirm DuPont’s investment in the country’s need for diversification of its EUV photoresist supply.
Volvo building U.S. battery assembly plant In preparation for bringing a new line of electric vehicles to the U.S. market, Volvo announced it will build a battery assembly plant at its existing facility in Ridgeville, South Carolina.
New game consoles expected to trigger demand surge for graphics DRAM and SSD's TrendForce expects the year-end release of new generation game consoles to trigger a demand surge of graphics DRAM and SSD's during the second half of 2020.
A new year begins with new machinery at Swedish Microwave In Motala, Sweden sits Europe’s oldest manufacturer of Low Noise Block down-converters (LNB) for the global satellite market, namely Swedish Microwave (SMW). The company is now kicking off 2020 with an investment in production.
Lucid eyeing April reveal of pre-production sedan Luxury EV manufacturer Lucid has announced that production is underway in Silicon Valley of 80 beta prototypes of its luxury sedan, Lucid Air, to be unveiled in April in New York City.
Ideal Industries moving the ball forward at Cree Following its March announcement that Cree had sold off the entirety of its lighting business to Ideal Industries in a USD 310 million deal, Ideal said it would remain dedicated to pumping investment dollars into the now privately-held Cree Lighting.
Former pSemi exec and CEO Jim Cable retires pSemi Corporation has announced the retirement of former CEO and long-term executive Jim Cable.
Rohde & Schwarz inks agreement to use Benchmark's muscles The German electronics group has signed a strategic agreement with US EMS provider, Benchmark Electronics, to enhance its manufacturing capacities.
Stoneridge appoints new VP of operations Stoneridge Inc. has announced Kevin Heigel as its new vice president of operations.
Gartner: Worldwide semiconductor revenue declined 11.9% in 2019 Intel reclaimed top spot in global semiconductor market; Samsung moved to no. 2.Load more news