Fears and claims over bloated semiconductor inventories would seem unfounded according to iSuppli analyst, Carlo Ciriello. Distributors controlled 36.9 Days of Inventory (DOI) at the end of the third quarter of 2009, down 15% from 43.4 DOI for the same time in 2008, according to iSuppli. Distributor DOI at the end of the third quarter was actually 17% less than the trailing three-year average.
“Concerns have been raised that a semiconductor inventory bubble appeared among distributors starting in the third quarter of 2009 that potentially could impact the expected recovery of the chip industry in 2010,” said Carlo Ciriello, an analyst with iSuppli. “However, iSuppli sees no evidence to support the claim that semiconductor inventories at distributors were higher in the third quarter of 2009 than they were at the onset of the downturn in the third quarter of 2008. In fact, iSuppli’s research indicates that inventory levels among these companies are well below the historical average.”
iSuppli said that its preliminary estimate for the end of the fourth quarter of 2009 puts DOI at 18.7% less than the three-year historical average. DOI at semiconductor makers declined to 66.4 at the end of the third quarter of 2009, down 11% from 74.6 for the same time in 2008.
The decline in distributor semiconductor inventories parallels that of the stockpile reductions among chip suppliers, according to iSuppli.