Feeds

World chip glut halved in Q1

Not out of the woods yet

  • alert
  • submit to reddit

Remote control for virtualized desktops

The world's chip makers and their customers ate into their combined stockpile of semiconductors rather more than had been forecast in the first quarter, market watcher iSuppli said yesterday. The research firm described the excess chip chow down as "undeniably a positive development for the global chip industry".

The researcher's preliminary figure for the value of unused chips in the electronics supply chain in Q1 2005 came to $500m, almost 36 per cent below its previous forecast of $780m.

It's also less than half the value of Q4 2004's inventory of unused product, $1.03bn.

Which is good news for the chip business, speeding the arrival of the point at which its customers begin boosting their orders again. Semiconductor inventory reduction is usually a slow process in the first three months of the year, as sales slow. Instead, sales have been above par, iSuppli said. Cutting back on chip output helped too.

Chip vendors hold the bulk of the surplus, which swelled rapidly during Q3 2004 to $1.62bn, 95.3 per cent up on the previous quarter's total, $829m, itself well up on Q1 2004's $12m stockpile.

Still, the outlook isn't certain, iSuppli admitted, citing reduced chip prices and "weak market conditions". The second quarter does not appear to be shaping up as a strong one for end-user demand, which will in turn limit product manufacturers' willingness to increase their spending on components, such as semiconductors.

That's one reason why iSuppli is sticking to its earlier forecast of 6.1 per cent chip industry revenue growth in 2005, despite the greater-than-expected reduction in Q1 inventory. And it cautioned chip makers not to make the same mistake they made last year: ramping up production rapidly in response to high levels of anticipated demand - demand which then never materialised. ®

Related stories

Elpida declares first annual profit
Freescale earnings grow post-restructure
Intel rides mobile express to strong Q1
Memory woes color AMD's Q1 red
TI meets lowered Q1 forecast
TSMC, UMC Q1 sales slide
Micron remakes a profit
World chip glut 'over early Q2'
Chip glut ebbs

Choosing a cloud hosting partner with confidence

More from The Register

next story
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
BT said to have pulled patent-infringing boxes from DSL network
Take your license demand and stick it in your ASSIA
Right to be forgotten should apply to Google.com too: EU
And hey - no need to tell the website you've de-listed. That'll make it easier ...
prev story

Whitepapers

Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Managing SSL certificates with ease
The lack of operational efficiencies and compliance pitfalls associated with poor SSL certificate management, and how the right SSL certificate management tool can help.