Excess inventory served as a boom for the global semiconductor industry in the first quarter of the year, new research reveals, mitigating the impact the Japanese disaster had on supplies.
The new research by IHS iSuppli (NYSE: IHS) indicated days of inventory among chip suppliers was up by 1.1 percent from the fourth quarter in 2010 to 80.3 days at the end of quarter one 2011.
This figure is also an increase of 9.1 days from the same period last year, representing a two year high, as inventories reached a level not seen since the first quarter of 2009 when figures stood at 82.4.
“Efforts by suppliers to build inventory during the seasonally slow period from the fourth quarter of 2010 through the first quarter of 2011 proved to be fortuitous,” said Sharon Stiefel, analyst for semiconductor market intelligence at IHS.
“While a large inventory overhang can be a negative development for the semiconductor industry – fuelling excess supply, dampening pricing and reducing profits – it turned out to be a positive factor during the first quarter as the industry contended with supply shortages.”
The number of weeks of direct disruption to the supply chain due to the Japanese disaster was limited during the first quarter due to the quake hitting on March 11th – quite late in the first quarter.
The number of days of inventory, according to the research, has been climbing steadily since the third quarter of 2009 – which indicates it is rising in line with a rise in inventory value dating back to the first quarter of 2010. Inventory value in the first quarter this year stood at an estimated 27.2 billion dollars.
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