Online information source for semiconductor professionals

Low inventory and low capex combine for strong 2010, says VLSI Research

11 November 2009 | By Mark Osborne | News > Fab Management

Popular articles

New Product: Applied Materials new EUV reticle etch system provides nanometer-level accuracy - 19 September 2011

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

New Product: ASML Brion‚??s Tachyon MB-SRAF enables OPC-like compute times - 19 September 2011

One by one, market research firms are turning bullish on the semiconductor industry and its growth prospects for 2010 and beyond. Following that trend is VLSI Research, which has noted, that IC inventory levels may have climbed in recent quarters but actually remain low by historical levels. Rather than a blip in IC demand, low capital spending and high fab utilization rates mean shortages and rising ASP‚??s should continue.

‚??It‚??s not surprising to see inventories rise since the semiconductor industry normally moves into the critical Christmas production ramp in the summer months,‚?Ě commented Dan Hutcheson of VLSI Research. ‚??The reported chip shortages tell you there‚??s not enough inventory in the supply chain for the fourth quarter.‚?Ě

‚??Even memory suppliers are using the ‚??P‚?Ě word, noted Risto Puhakka, at VLSI Research. ‚??They were either already profitable in the third quarter or are expecting to be profitable in the fourth quarter.‚?Ě
VLSI Research‚??s Dan Hutcheson, noted that low CapEx last year resulted in a declining production capacity base, which led to high utilization rates recently, as chip makers tried to catch up with a turnaround in end demand, which actually started last January. It took some time for industry executives to be convinced it wasn‚??t just a bump. So, lower capacity combined with low inventories is likely to continue to keep chip prices high, which will make for a very good year for chipmakers in 2010.

Related articles

VLSI research revises 2011 and 2012 semiconductor forecasts - 30 November 2010

VLSI Research up semiconductor equipment spending and IC forecast - 19 January 2011

Advanced probe cards lead sales growth according to VLSI Research - 19 May 2011

VLSI Research lists Top Ten critical subsystems suppliers for 2007 - 12 May 2008

Nearly 50% fall in semiconductor equipment sales, says VLSI Research - 21 November 2008

Reader comments

No comments yet!

Post your comment

Please enter the word you see in the image below: