Global Sources
EE Times-India
Stay in touch with EE Times India
EE Times-India > Manufacturing/Packaging

Analyst: Trouble still ahead for IC makers

Posted: 03 Apr 2008     Print Version  Bookmark and Share


Excess semiconductor inventories have gone down, but there is still more trouble ahead for IC makers.

According to a preliminary forecast from iSuppli Corp., excess semiconductor inventory is projected to decline to Rs.11,448.73 crore ($2.9 billion) by the end of the first quarter, down 14.6 percent from a revised Rs.13,422.65 crore ($3.4 billion) level in the fourth quarter of 2007.

This follows a 21 percent reduction in the fourth quarter of 2007, according to the market research firm.

Cause and effect
''The expected drop in surplus stockpiles in the first quarter mainly is due to a pullback in semiconductor production among suppliers,'' said Rosemary Farrell, analyst for iSuppli, in a statement. ''In reaction to the lackluster demand late in December, chip suppliers began throttling back on manufacturing. This allowed their customers to draw down their inventories.''

But IC inventory levels could jump again. ''With inventory levels high at the semiconductor suppliers themselves, and with worries mounting regarding market conditions, stockpiles could begin rising again in the second quarter,'' according to iSuppli. ''If the end-demand situation worsens, and order cancellations begin rolling in, then suppliers will be forced to add to their already bloated inventories.''

There are mixed signals in the marketplace. ''Although the PC supply chain remains concerned about inventory and demand for microprocessors, the slowdown in the price war between Intel Corp. and Advanced Micro Devices Inc. has removed much uncertainty from the market,'' according to iSuppli.

Memory matters
''DRAM inventory increased slightly at the end of February and iSuppli expects average selling prices (ASPs) for these memory chips to keep sliding throughout March. DRAM ASPs are expected to hit bottom in the second quarter,'' according to the firm.

''Lower-than-expected demand and pricing for NAND flash in the first quarter led Intel to reduce its financial outlook. The company plans to write off excess NAND inventory at the end of March. As iSuppli has reported, weak consumer trends are causing buyers to cut their expected NAND order levels for 2008, with Apple Inc. the most notable example,'' it said.

- Mark LaPedus
EE Times

Comment on "Analyst: Trouble still ahead for IC ..."
*  You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.


Go to top             Connect on Facebook      Follow us on Twitter      Follow us on Orkut

Back to Top