Semiconductor channel merchants: inventory reduction is slower than expected

CTOnews.com, February 27, according to a report in Taiwan's Economic Daily, the semiconductor inventory problem not only needs to be faced by IC designers, but also has to "tide over the difficulties" with the original chip manufacturers in order to take into account the long-term cooperative relationship. Even if there is a small amount of urgent order demand for some chips one after another, some IC channel manufacturers say frankly that the speed of inventory removal is still slower than originally estimated.

According to the analysis of IC channel manufacturers, whether the current short order of the market is a flash in the pan, inflation, the Fed's interest rate hike, the conflict between Russia and Ukraine, and whether there will be domestic demand for retaliatory buying are the focus of observation.

Unnamed IC channel manufacturers revealed that the current inventory elimination situation is not as expected, assuming that the original estimated inventory elimination speed is into 0.5 months of goods, with sales of 1 month of goods, can gradually reduce 0.5 months of inventory; but now the actual situation is to enter 0.6 to 0.7 months of goods, but only sold 0.8 to 0.9 months of goods, which leads to inventory decline slower than expected.

CTOnews.com learned from the IDC report that due to inventory adjustments and weak demand, IDC expects global semiconductor revenue to decline 13.8% year-on-year in the first quarter of this year, and is not expected to turn positive until the fourth quarter, with total revenue declining 5.3% for the year.