According to an analysis by UBS, chip inventories for consumer devices are at their highest level in more than a decade.
Inventory levels, typically measured in days, are at their highest levels in more than a decade, or about 40 days above the median for the chip industry and its supply chain, according to a UBS analysis.
Chip inventory levels are “well above our target level,” said Sanjay Mehrotra, chief executive of memory maker Micron Technology Inc.
What is happening in chips amounts to good news for consumers who can get their hands on products from washing machines to laptops faster, and sometimes more cheaply, than a year ago.
Some chipmakers, however, are not concerned about rising inventories. Lattice Semiconductor’s inventory increased by about 29% in the year ended October 1, but the company’s CEO Jim Anderson is not worried about this, saying that the company’s products can be used for 15 to 20 years, and the risk of being eliminated is very low.
Despite the short-term oversupply, there are still many chip companies preparing for a long-term increase in chip demand. Samsung Electronics still plans to increase chip production capacity at its largest semiconductor plant next year. In addition, Micron plans to build a facility in upstate New York that could cost as much as $100 billion.
To avoid electronics supply-chain disruptions, you may also wish to consult an expert in electronics component supply. With more than three decades of supply-chain expertise, Astute Electronics is ideally placed to work with you on your daily component requirements.
For more help with looking at supply chain options, contact Astute Electronics
