Electronics Weekly Electronics Design & Components Tech News
TI is shipping less ICs than its customers are using with disties preferring to run down their inventories than keep their stocks up.
For an analogue company, with a huge product portfolio, 17% of the world market and a large proportion of its sales going through distribution, TI is more sensitive to the judgments of disties than most companies.
TI had expected Q4 revenues of $3.26 billion and now expects sales of $3.19 billion – a discrepancy which seems reasonable to everyone except stock market analysts who promptly marked TI’s shares 3% down.
Distributor trade bodies generally take the view that the first half of 2012 will be a time of inventory correction for semiconductors, though the passive inventory has been worked off, but that H2 2012 will see a return to a normal supply/demand semiconductor market.
Europe led the weakness for TI. Only Japan is growing in Q4 and the only industry sector not falling off is wireless.
Europe, of course, could rebound if a settlement is found to the debt problem but that could take months.
However, there is always the spectre of 2009 hanging over the industry when a totally unexpected upswing in demand left companies with lead-times stretching out to 20 weeks and beyond and OEMs having to curtail production for lack of supplies.
Thank you, mgp-1, I’m very flattered that you think I’m on the right track. Happy to accept your bet, but could we make it a packet of crisps? I think crisps go better with Dom Perignon than peanuts.
Spot on David … you’ve hit the nail on the head, and this is exactly what we will be forecasting at our IFS2012 Industry Forecast seminar on Jan19 in London together with the reasons why. I’m sure you remember we were the only analyst who correctly forecast the 2009 upswing, whilst everyone else was still cutting back and in denial. No-one listened to us then, I don’t expect them to listen now either, which will only amplify the upswing even more! The recent WSTS forecast for 2012 is 2.6 percent growth on 2011. Well, they’ve got the numbers right, just the decimal point that’s wrong! Unless the euro implodes and disappears up its Drachma, I bet you a bottle of Dom Perignon (and a packet of peanuts!) next year’s growth is a lot closer to 26 percent than 2.6 percent!
TI has been very sensitive and fast reacting to market changes. Tracking inventory inside and at the customers is mandatory to avaoid stock desasters. This is a very good habit to avoid bigger losses through inventory write-offs. I think this is a healthy sign and just reflects that an strong upturn end is slowdown and hopefully not a desaster due to potential overbookings in the recent past.