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Amidst upturn VLSI notices inventory growth

Posted: 03 May 2010     Print Version  Bookmark and Share

Keywords:semiconductor industry  IC shortage  chip inventory  NAND flash 

The semiconductor industry is on the rebound but VLSI Research Inc. notices signs of growing chip inventories in the channels. The firm said IC inventories reached Rs.112.58 crore ($24.38 billion) worldwide in February, a 46 per cent increase from the same month in 2009.

"They are close to passing the peak set in October of 2008," said G. Dan Hutcheson, CEO of VLSI, in a report . "While alarming, VLSI does say that current inventory-to-billings ratios are within healthy ranges."

On the other hand, there are also widespread reports of select component shortages in the supply chain. Analogue, discretes and memories are in tight supply.

A few weeks back, memory was "red hot as shortages continued to drive spot prices through the roof. DRAM in particular, was on fire. Spot prices for legacy parts soared by more than 20 per cent amid fears that supply will remain tight due to lack of capacity. NAND flash also had a strong week thanks to improving demand. The good news was that MPU prices finished the week flat, following three consecutive weeks of declines," according to VLSI.

"Wafer production capacity is overheating the market and leading to double booking," Hutcheson said. "This is being compounded by the fact that chip makers have failed to invest enough to keep yields high as they introduce new designs based on smaller linewidths."

February chip factory utilisation levels were 93 per cent for the front end, 95 per cent for test, and 94 per cent for assembly, according to the firm.

- Mark LaPedus
EE Times





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