Friday, 22 February 2013

IHS Report Chip Inventory at Semiconductor Suppliers Reaches an Alarming High

Amid weak market conditions, IHS report that chip inventory held by semiconductor suppliers reached an alarmingly high level in the third quarter of 2012.

Semiconductor revenue declined by 0.7 percent during the forth quarter of last year. These poor results came after inventory reached exceedingly high levels by the end of the third quarter of 2012. This amounted to 49.3 percent of total semiconductor revenue, which has been the highest since 2006.

During the final two quarters of 2011, stockpiles actually decreased seemingly showing a promising reduction. Yet, inventories steadily increased once again, reaching 47.5 percent of total revenue before hitting its peak in the third quarter of 2012.

These inventory levels refer to chip stockpiles specifically in the hands of semiconductor suppliers, not throughout the electronics supply chain. Supplier levels are then compared against combined revenue from a sample 75 semiconductor supplier companies. High levels indicate unsold stockpiles and also unrealised revenue tied up with the stagnant inventory.

IHS report that this high level of inventory was due to the expected high demand of semiconductors for products thought to have sold well over the Christmas season. With consumers still wary of the economic state, these sales never materialised and we only saw a 0.7 percent increase in consumer purchases two weeks prior to Christmas, the worst performance since 2008.

Do you have excess inventory? Trading Specialists can help! Part of the Cyclops Group, Trading Specialists can buy your excess, obsolete, end of life and slow moving inventory. We work with you to find the most effective solution to maximise your returns. With our service we will enable you to access this tied up revenue as well releasing space within your facility, meaning you can avoid inventory write offs.

To speak to one of our team please call us on +44 (0) 1904 436 444 or visit our website to find our more about our service.

Click here to read the IHS' full press release.

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