Semiconductor Inventory Falls in Q1 as Outlook for Electronics Demand Rises

From X-bit Labs: Total inventory held by semiconductor suppliers declined significantly in the first quarter as excess stockpiles created during 2012 were cleared away, done in anticipation of a resurgence in consumer demand for electronic products expected by the second half of 2013.

Semiconductor makers’ inventory in the first quarter declined to $37.6 billion, down 4.6% from $38.4 billion in the fourth quarter of 2012, according to information and analytics provider IHS. The figure below presents the IHS estimate of inventory held by semiconductor suppliers in terms of revenue.

The decline in inventory paralleled the contraction in semiconductor revenues, which fell 5.1% sequentially, following the normal seasonal demand pattern.

“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 contributed to a decline in chip inventories. At the same time, semiconductor companies maintained tight control over their manufacturing capacity, contributing to the decline in inventory,” said Sharon Stiefel, analyst for semiconductor market intelligence for IHS.

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