Electronics Weekly Electronics Design & Components Tech News
“Chip makers and other participants in the chain are shorter on supply than is widely perceived,” says iSuppli’s Carlo Ciriello.
‘Except for a modest increase in Q309 and the rise of values beginning this year, inventory dollars have consistently declined since Q308,’ say the analysts.
Current inventory figures indicate that stockpiles were not replenished in Q1, and device manufacturers continue to operate on “hand-to-mouth,” just-in-time fulfillment schedules.
Many companies are reporting book-to-bill ratios ‘dangerously in excess’ of 1:1, say the analysts, suggesting that ‘double ordering appears common, especially among upstream suppliers’.
Capacity is straining to keep up with downstream demand, resulting not only in long lead times but also in shortages for many commodity components.
Does all this translate into a 40% rise for the market this year?
With all the major analysts predicting 30%+ rises, then there must be a chance for a 40% growth year in 2010.
But it still wouldn’t rate as the best year in the industry’s history.
That was 1984 – when the market rose 50%.
Thanks Malcolm – sounds right to me
“Lead Times Up, Inventories Low, Double-Ordering Rife, Capacity Strained” a headline made in chip industry heaven … maybe that’s why item 5 is missing … what happened to “Prices Up”?
Sometimes I dispair of the chip industry’s current business savvy. You’ve got no capacity, you’ve got orders coming out of your ears, you’ve just suffered five or more years of falling ASPs … hello; demand exceeds supply, prices up double.
And when your ‘loyal’ customers scream at you “you can’t do that” just remind them how badly they treated you when you were struggling, and then sit them down to a serious price negotiation based on a five year rolling contract and cast iron, non-cancellable committment to buy capacity from you come hell or high water.
That way you’ll have a solid forward order committment and be able to plan your investment capacity better, otherwise it’s quite simple. Chip business as normal … now it’s your turn to get screwed!