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Analysts Warns of High Levels of Chip Inventories

"Global supplier semiconductor stockpiles at the end of the second quarter stood at an unusually elevated 83.4 Days of Inventory (DOI)," IHS said in a press release. This is, in fact higher than the 83.1 DOI in the first quarter of 2008.

According to the market research firm, the Q2 value jumped from 79.9 days in Q1 and is the first in twelve quarters to climb above 80 again. IHS also noted that the Q2 level as 11 percent above historical seasonal averages.

"For the semiconductor industry, wading into such potentially troubling territory - reminiscent of the dark days leading into the recession- could herald the beginning of a critical inventory adjustment period," said Sharon Stiefel, semiconductor analyst at IHS. "The correction is likely to take place during the next few quarters and will not be completed until mid-2012. As such, it will involve suppliers making a prolonged reduction in their inventory levels to avoid dangerous oversupply situations."

IHS also said that it is reducing revenue forecasts for the third quarter as "various indicators point to a stalling economy." Instead of a previously expected growth of 4.6 percent, the new forecast sees 2.9 percent growth in 2011, which is down from 32.4 percent in 2010.

  • aftcomet
    I'll help you with that. Let's have a fire sale.
  • I'm guessing part of it is due to people stalling till BD. The (unfortunate) results are out and I think this will no longer be a problem.
  • davewolfgang

    But yeah bear95...I see Intel's flying off the shelves even faster now.
  • southernshark
    bear95I'm guessing part of it is due to people stalling till BD. The (unfortunate) results are out and I think this will no longer be a problem.

    I doubt it. AMD is a small player and its top end products are even smaller. Inventory buildups like this imply low demand in all segments of the industry. 98 percent of computer buyers have no clue what Bulldozer was, and only 25 percent of those people cared.
  • southernshark
    I mean 25 percent of the 2 percent cared.... so .5 percent cared.
  • velocityg4
    Given that anything better than a Core Duo or Athlon X2 with 2GB RAM will do just about anything 95%+ of users want and quickly. It is not surprising that sales remain slow. Heck a Pentium 4 and 1GB of RAM in XP is plenty for the majority of people.

    With Windows 8 being streamlined to work well on 1GB of RAM and an ARM or Atom CPU it does not bode well for the hardware industry.
  • bak0n
    Just get out the Southern Island GPU's and I'll do my part in eating up the access inventory!
  • buzznut
    aftcometI'll help you with that. Let's have a fire sale.Sounds good to me. I hope this will help drive BD prices down. They are overpriced as is.
  • dalauder
    So there should be both RAM and CPU firesales coming up? I'm now expecting to hear about high GPU inventories. Considering how much this high inventory "problem" has been dropping RAM prices lately, I'm excited!
  • ojas
    i don't know why but i'm having a feeling that this is the second time i've read this on tom's in the last month...oh...
    *sees who's written it*
    ...never mind...