Semiconductor inventories mirror 2008 recession

Bad news on the horizon from analyst house IHS about global semiconductor inventories.

As we reported earlier this week, we reported how chief analyst at Future Horizons, Malcolm Penn, predicted there’s a chance the chip market might grow just one percent this year.  Not good news, then, that IHS says inventory levels are at a height we haven’t seen since the beginning of the recession in 2008.

IHS’ inventory insider report says that stockpiles by the end of the second quarter were at an unprecedented high of 83.4 Days of Inventory (DOI). That trumps even the 83.1 DOI in the first quarter of 2008, when times turned tough.

The second quarter this year sees the first time in 12 consecutive quarters, IHS says, that the DOI has tipped over from 80 days. It was 11 percent above the seasonal average in the second quarter, which is just shy of the 11.1 percent oversupply from the first quarter in 2008. What followed was a down-turn the industry had just started to climb out from. 

IHS claims it is a warning for chipmakers – with revenue projections rolled back across the industry indicative of a stagnant, or at least stalling gobal economy.

Still, there is some good news, with decent performances penned in for data processing and wireless, which IHS says should lessen the blow and make up for declines elsewhere.