Semi industry has $3 billion of excess stock

MARKET RESEARCH FIRM Isuppli reckons there’s over $3 billion worth of excess inventory – that is to stay unsold stocks – swilling around in various factories and warehouses worldwide.
That’s not as bad as the $6 billion plus lying around in the first Q of 2006, but it’s certainly not good news for the semi industry.
The fab folk, reckoned Isuppli, are doing more to control that, this quarter, by cutting down on expansion and controlling costs and production.
As usual, the semi industry is a matter of oversupply or undersupply – a problem all factories and fabs have, depending on demand.
The industry is now apparently happy with a CAGR of seven per cent, rather than the 27 per cent CAGR it enjoyed 20 years ago.
The analysts from Isuppli reckon that revenue will decline by 7.5 per cent, compared to Q4 of last year. They have consulted their crystal balls, and reckon the second quarter will somewhat mitigate Q1’s slowness.
Still, you can imagine the salesmen gazing at a pile of chips that haven’t yet found a place in the sun and wondering about their bonuses. ♦

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