The market research firm believes that the chip industry is still rebuilding once depleted stockpiles and is set to cope with an expected increase in demand later this year.
The market research firm said that the overall inventory level has climbed to a supply of 81.5 days in Q2, up from 80.3 days in Q1. Inventory levels have risen for the seventh consecutive month in a row in the second quarter, IHS iSuppli said.
Inventories throughout the electronics supply chain, including at semiconductor suppliers, distributors, contract manufacturers and original equipment manufacturers (OEM), during the first quarter rose for all sectors except for computer makers. Computer OEM stockpiles declined more than 8%, likely because they shipped most of their products to retail outlets for restocking following the busy holiday season in the fourth quarter of 2010. Memory and analog companies had the highest percentage increases in their internal inventory, with growth of almost 15%, according to IHS iSuppli. the market research firm said that growth in the chip industry "will be stimulated by market demand for popular consumer items like smartphones and tablets, as well as for perennial reliables such as PCs."
Whiel the earthquake in Japan is not believed to have significant impact on the supply of semiconductors, IHS iSuppli said that raw wafer supply will remain somewhat of a concern as Japan provides approximately 60% of the global supply of semiconductor wafers. " However, in a positive indicator, leading semiconductor foundry Taiwan Semiconductor Manufacturing Co. announced that it will not experience any detrimental effects from the aftermath of the disaster," IHS iSuppli noted.
