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Low inventory and low capex combine for strong 2010, says VLSI Research
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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,? 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.?
??Even memory suppliers are using the ??P? 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.?
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.
