Inventories reach ‘appropriate levels’
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After a whole year of decline, global inventories of chips have reached what are called 'appropriate levels' by market researcher iSuppli. The company says this clears the way for stockpile rebuilding and higher sales in the second half of the year.
At the end of Q2 2009, iSuppli estimates that inventories fell to $24.9billion, down from $32.6bn in Q2 2008. But it wasn't just chip suppliers that reduced inventories; other segments of the electronics supply chain followed suit, including storage product makers, mobile handset oems, electronics manufacturing services providers and distributors.
iSuppli forecasts that second half inventories will increase modestly in unison with sequential revenue increases for the global semiconductor industry. Global semiconductor revenue will increase by 10.4% in Q3 and by 4.9% in Q4, iSuppli predicts. Meanwhile, it adds that semiconductor inventories will rise by 5.5% in Q3 and by 1% in Q4.
"Despite the more optimistic outlook, corporations remain apprehensive about the second half, consistently noting fragile demand," Ciriello said. "Market values have declined and the tradeoff between raising prices and maintaining market share has commanded more management attention than usual."
