So who holds the biggest share of excess chip inventories? The main culprits are the semiconductor manufacturers, which hold 48 percent of the industry's excess stock. The electronics manufacturing-services (EMS) industry follows with 29 percent. EMS providers have managed to reduce their excess inventory in the last quarter at the expense of chip suppliers, said Rosemary Farrell, senior market analyst for iSuppli Corp.

If you didn't know who the best inventory managers are in the business, you do now. That means there shouldn't be any more debates over whether distributors or EMS companies do the better job of inventory management. The proof is in the numbers.

Despite the fact that distributors aren't shouldering the burden of huge excess inventories for chip devices, they have put big efforts into liquidating excess inventories, honing their inventory management skills and improving their supply chain processes over the past year. The effort is now paying off in fewer days of inventory.

One of the best inventory managers ranked by iSuppli is distributor Pioneer-Standard Electronics Inc. To determine the rankings, iSuppli took a look at company sales, cost of goods sold, inventory levels and target inventory levels for each industry sector. Days of total inventory at Pioneer-Standard numbered 55 in the first quarter and 54.3 in the second quarter of this year. For the distribution industry overall, the days of total inventory (based on cost of goods sold) were 70 in the first quarter. The target inventory level for the industry in the second quarter was about 65 days, but those target numbers vary quarter by quarter, according to iSupply data.

The overall good news is that despite a slower-than-expected inventory work-off, excess-chip inventories were down 33 percent in the first quarter compared with the fourth quarter of 2001, and down a whopping 80 percent from the first quarter of 2001.