After two quarters of ballooning semiconductor inventories in the electronics supply chain, early results for the third quarter indicate that excess chip stockpiles are not going away, says market researcher iSuppli. This is storing up trouble for next year - it is unlikely that there will be a boom at Christmas, so the overhang will move into 2007.
“After excess inventories rose to $3.9 billion in the first half of the year, the overloaded situation in the supply chain was expected to ease slightly moving into the second half,” said
iSuppli’s updated estimate shows excess semiconductor inventory in the global electronics supply chain in the third quarter remained flat at the second-quarter level of $3.9 billion. A lot of this is in the PC market, but there is also overhang in networking and consumer.