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BalaLak
I do not believe that lead times are shrinking at foundries. This usually ...
yalanand
I wish this is not inventory bubble. Things might change overnight. Dow is ...
Chip market inventory growing, says iSuppli
Peter Clarke
8/24/2010 11:24 AM EDT
LONDON – Chip inventory expanded sequentially by 9 percent in the second quarter of 2010, according to a survey of 35 chip manufacturers, conducted by industry analysis firm iSuppli Corp. Meanwhile foundry lead times have shrunk, according to a Digitimes article.
Midway through the second-quarter, total inventory from approximately 35 semiconductor component manufacturers stood at $9.6 billion, up 9 percent from $8.9 billion in the first quarter and this represented a faster climb than the seasonal average of 3.2 percent, iSuppli said.
However, the firm argued that coming off a low base the growing inventory does not yet represent a cause for concern in the industry with demand expected to increase in the second half of 2010. "Overall, however, the increase in inventory reflects a justifiable build, and iSuppli is not concerned over an inventory bubble," iSuppli said.
Chip companies enjoyed record revenues, profits and gross margins in the second quarter and positive revenue guidance for the third quarter is leading managers to increase inventories for the second half of the year.
Most chip manufacturing plants are close to being sold out and the companies are taking looking to invest in increasing capacity
Nonetheless, lead times at foundries are shrinking fast, according to a Digitimes report that cited unnamed Taiwanese IC design engineers. Lead times at 200-mm wafer fabs have dropped to two weeks from more than 10 weeks earlier in 2010 the article said. Lead times on 300-mm wafers are three weeks.
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Luis Sanchez
8/24/2010 4:59 PM EDT
Interesting article about the semiconductor’s industry. This increasing does allow to think that perhaps the demand has decreased. But according to the news, the inventory is growing as preparation for the demand that in the not so distant future is expected to rise.
I just imagined when the Moore’s law is approached, the whole semiconductor industry would perhaps reach it’s third age and the sales would greatly reduce because the computers would stop getting faster, or reduction in size would not be possible.
Then, the need for automated, media player, and all sorts of gizmos would shift from the semiconductor to perhaps the quantum mechanics electronics? Optical circuits? I wonder how inventories would look like when the modules are optical devices.
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Sheetal.Pandey
8/24/2010 10:29 PM EDT
Looking at how technology has overpowered a common man's life, there is no surprise that chip market is growing. I think now a man like to talk on his cell phone or listen to his ipod more than taking a walk or spending time quietly.
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Robotics Developer
8/25/2010 4:14 PM EDT
The lead times from foundries are shrinking and chip inventories are building but in the contract manufacturing areas they are complaining about longer lead times for parts; I wonder how much of the buildup in inventories are for older parts that are being phased out of current or future production? It just might mean that there are high demand common components (thinking newest/latest technology) and low demand components that are in the high yield curves of production but have little demand. It would be nice to know a little more of the under the hood details: which types of chips are building inventories, which are in high demand, etc..
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yalanand
8/25/2010 10:20 PM EDT
I wish this is not inventory bubble. Things might change overnight. Dow is falling like pack of cards and hitting new lows everyday. Just wondering if Semiconductor industry will carve its own way and come out of this double dip recession or will succumb to this recession needs to be see.
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BalaLak
8/26/2010 12:26 AM EDT
I do not believe that lead times are shrinking at foundries. This usually happens if they are running much less than their peak capacity, but they are running at peak capacities now which means there is a huge demand from semiconductor companies to build wafers. I know for a fact that semiconductor companies are quoting long lead times to their customers and there is no way this would be the case if lead times are shrinking at foundries. In fact, I believe the lead times are getting longer. It is true that there is a slowdown in systems shipments (http://www.eetimes.com/electronics-news/4206446/Semico-s-IC-forecast-index-takes-dip-semiconductor), but it's yet to catch up with the semiconductor industry.
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