Chip suppliers reach record stockpile

Chip suppliers have reported an increase in semiconductor inventory levels for the seventh consecutive month as suppliers continue to rebuild stock.

Despite the disruption of the earthquake in Japan, the second quarter saw more increases to inventory levels.

In fact, following the disaster, higher levels of inventory could become the norm as a protection against future scenarios.

The total stockpile level for all semi suppliers other than non-volatile memory is expected to rise to 81.5 days, according to IHS iSuppli figures, ahead of an expected increase in demand later this year.

This is a 1.5 percent rise from 80.3 days in the first quarter, a continued rise quarter on quarter from the end of 2009.

According to IHS iSuppli’s analysts, chip suppliers are aiming to “strategically build” their inventory levels ahead of a spike in demand later this year.

This hasbeen helped along by slower demand in the first quarter.

The trend towards increased inventories has also been seen throughout much of the electronics industry.

Distributors, contract manufacturers and original equpiment manufacturers (OEM) have all been upping stock levels, as various factors create an environment in which stock has been amassed.

The only area which did not top up its inventory levels was in the PC maker market.

In fact, computer OEM stockpiles dropped over eight percent, thanks to shipping out products for sale ahead of the holidays at the end of the year.

Memory and analogue companies showed the highest increase, grabbing an extra 15 percent of stock.

Increases will continue throughout the year, due to a slightly healthier global economic siutaion.

A strong demand for smartphones and tablets, not to mention the PC market, will help.

While it is largely thought that the semi industry has managed to successfully get through the Japanese disaster in March, there are concerns about the supply of raw wafers.

A bulid up of supply during two preceding quarters meant that the effects of the disaster were largely reduced. This was aided by the swift repairs and shifting production away from Japan.

However, with Japan accounting for 60 percent of the global supply of wafers, it’s feared that supply could be affected, despite TSMC’s positive claims.