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Excess inventory?

9 February 2005 News

The amount of excess semiconductor inventory in the electronics supply chain continued to rise in the third quarter 2004, despite rapid moves by chip suppliers to trim production to adjust to slowing demand, according to market researcher iSuppli.

Although inventories remain low, the bloated stockpiles dragged on many suppliers' Q3 results. According to iSuppli, chipmakers have expressed confidence that excess inventories will be eaten by the end of Q4, or by early Q1 of 2005. However, it still believes that the excess inventories should be a cause for concern and thus is maintaining its 'yellow alert' for chip stockpiles.

After enjoying sequential growth of 5,8 and 1,8% in Q3 qnd Q4, iSuppli predicts semiconductor sales increases will stall in the first quarter of 2005, rising by a scant 0,02%. Growth will pick up throughout 2005, following normal seasonal patterns. However, for the entire year, semi sales will rise just 9,6% - far less than the 25,4% growth anticipated for 2004.





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