Semiconductor inventory rises in July and manufacturers may increase order buffer

In the second quarter of the year, the level of semiconductor inventories of global chip suppliers is expected to increase. It should have risen for the seventh consecutive month. It is due to the inventories of industrial reconstruction being consumed, and it is preparing for the expected increase in demand. According to the latest IHS forecast, the total inventory level of all semiconductor suppliers in the second quarter (excluding the large memory chips) is estimated to rise to 81.5 days, which is 1.5% higher than the 80.3 day in the first quarter, plus the increase this time. Inventory levels have been rising since the last quarter of 2009.

Analyst Sharon Stiefel: “Incremental inventories in the first quarter reflected the efforts of semiconductor suppliers to rebuild their product inventory. Last year, due to capacity reduction, the supply was in short supply. Suppliers also turned to strategic inventory establishment because of the expected increase in demand later this year. Because of this coincidence, semiconductor component makers have been able to use the first quarter of the season to rebuild their inventory."

Inventory of electronic product supply chains, including semiconductor suppliers, distributors, foundries, and original equipment manufacturers (OEMs), has risen, with the exception of computer manufacturers. Computer OEM inventories fell by more than 8%, probably because retailers rebuilt stocks after the year-end consumer season in the fourth quarter of last year, so they shipped large quantities to retailers.

In comparison, the percentage of internal memory in the memory chip and analog chip factory rose the highest, which was nearly 15%, while IC manufacturers and distributors saw the smallest increase.

With the overall economic factors stimulating the growth of the global electronics industry, and generally positive (in addition to the US housing market and the rise in gasoline and food prices), semiconductor inventories may continue to rise at the end of the year, and the market for popular products such as smart phones, tablet computers, etc. Demand may stimulate growth.

The IHS study pointed out that the 311 earthquake in Japan had little effect on the inventory level of the electronic product supply chain because inventory was already established in the first two quarters. As a matter of fact, a wider range of production disruptions may have occurred, but due to the availability of appropriate supplies, and the production plant has been repaired and restarted in a timely manner to resolve the crisis, some manufacturers have responded flexibly and moved production outside of Japan. Factory.

One of the continuing worrying parts may be the supply of raw material wafers, because Japan is the supplier of nearly 60% of the world's semiconductor wafers.

Seeing that the market has been turbulent recently, manufacturers may increase their orders as buffers to avoid future supply chain disruptions. Maintaining higher stocks in the future may become the new normal, reducing the impact of natural disasters and political turmoil on production.