Online information source for semiconductor professionals

Gartner warns over semiconductor inventory levels

20 September 2011 | By Mark Osborne | News > Fab Management

Popular articles

Oberai discusses Magma’s move into solar PV yield management space - 29 August 2008

‚??Velocity‚?? the new buzzword in Intel‚??s PQS annual awards - 12 April 2012

Applied Materials adds Jim Rogers to Board of Directors - 29 April 2008

TSMC honors suppliers at annual Supply Chain Management Forum - 03 December 2008

Sematech Litho Forum: Sematech mulling multi-beam mask writer effort - 12 May 2010

Days of inventory of semiconductors are at “worrisome levels given current conditions,” according to market research firm, Gartner. The expectation is that an inventory correction is due in late 2011. Gartner also noted that average selling prices (ASPs) were tracking below trend levels, with overcapacity in the foundry industry expected to prolong the pricing weakness.

Gartner expects that the industry will undergo a moderate inventory correction during the next few quarters, which will lower demand for semiconductor production in the second half of 2011 and early 2012.

According to Gartner, the proportion of total semiconductor inventory held by OEMs is rising but coming off near historic lows, which will help reduce the impact of an order correction on semiconductor vendor sales.

"The semiconductor industry entered the third quarter of 2011 with moderately high levels of inventory," noted Gerald Van Hoy, senior research analyst at Gartner. "Current levels are too high given the weakening economic sentiment, and the industry must rein in production growth and take action to reduce accumulated inventory. We expect that these actions will occur during the next few quarters with production and sell-through expected to return roughly to balance by the second quarter of 2012."

Gartner Index of Inventory Semiconductor Supply-chain Tracking (GIISST) remains at caution levels with days of inventory (DOI) at 1.12 in 3Q11. Within the GIISST, an above DOI level of 1.10 indicates inventories are inflated.

Related articles

Inventory? What inventory? - 02 March 2009

Gartner: Semiconductor sales to decline in 2011 due rapid fall in demand - 15 September 2011

Second quarter IC sales to rise 4.9%, according to Gartner - 01 June 2009

Gartner cuts NAND flash market growth for 2008 by half - 03 March 2008

Gartner revises semiconductor market growth in 2008 - 03 March 2008

Reader comments

No comments yet!

Post your comment

Please enter the word you see in the image below: