Thursday, 4 July 2013

Good News For The Electronics Industry as Semiconductor Inventory Falls in Q1

IHS have reported that good news could be on the horizon for the electronics industry, stating that the excess stockpiles that were created during 2012 (read our blog post covering this story here), have now been cleared.

This excess stock clear out was undertaken in anticipation of a resurgence in demand for electronic products which is expected by the second half of 2013.

According to IHS, semiconductor inventory declined to $37.6 billion in the first quarter, down by 4.6 percent from $38.4 billion in the forth quarter of 2012.

The graph below shows IHS' estimate of inventory held by semiconductor suppliers in terms of revenue.

The decline in inventory was paralleled by the drop of semiconductor revenues which fell 5.1 percent following the normal seasonal demand pattern.

Sharon Stiefel, analyst for semiconductor market intelligence for IHS states “While overall chip revenue declined in the first quarter, falling inventories among chip suppliers - combined with expanding stockpiles at distributors, contract manufacturers and original equipment manufacturers (OEM) - indicate that consumer demand for electronics rose during the period”.

This being said, inventory levels are expected to rise again in the second quarter. This will be in response to the positive order rates from manufacturers, but consumer stockpiles are thought to remain relatively flat.

Follow this link to read the IHS article in full.

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