By James Carbone -- Purchasing, 1/15/2009 2:00:00 AM
With semiconductor sales slumping the fourth quarter of 2008, semiconductor inventory levels in the global electronics supply chain started the new year about three times as high as they were in the third quarter of 2008, according to researcher iSuppli.
Excess chip inventory levels increased in the fourth quarter and were projected to rise as high as $10.2 billion in value, up 268% from $3.8 billion at the end of the third quarter. The huge inventory levels mean that chip prices will continue to fall at least in the first quarter of 2009. It could mean also the delay in the recovery of the semiconductor industry.
OEMs have not been able to cut production as quickly as they would have liked because of workforce rules in some countries and cancellation windows at semiconductor suppliers, according to Derek Lidow, president and CEO of iSuppli in El Segundo, Calif.
The inventory is being held by all parties in the supply chain including chipmakers, OEMs, electronics manufacturing services providers, original design manufacturers and distributors.
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