Inventories rise, prices to fall
Staff -- Purchasing, 9/16/2004 2:00:00 AM
Expect price erosion for semiconductors for the rest of this quarter. Reason: Weak demand for chips resulted in semiconductor inventory levels at chip suppliers increasing dramatically in the second quarter.
Semiconductor inventories in the electronics supply chain at the end of the second quarter amounted to $827 million, according to researcher iSuppli. In the first quarter there was just $12 million of excess inventory.
Semiconductor companies were slow to reduce utilization rates after chip buyers canceled their orders in June. However, demand is expected to pick up late in the third quarter.
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