What's Hot
Jim Carbone -- Purchasing, 8/17/2004 2:00:00 AM
Some industry analysts are doing some hand wringing over last month's announcement by Intel that it had a 15% increase in inventory in the second quarter and was expecting lower profit margins for the year.
Intel said inventory increased because it improved its yields and was getting more useable chips for each wafer. It said it expected its profit margin to decline from 64% to 62% for the year.
Besides yield improvement, inventory likely increased because of a seasonal slowdown in demand. Demand for computers, and other electronics equipment is usually weak in the first quarter. However, equipment and semiconductor makers reported demand for equipment and chips was strong in the first quarter, but eased back in the second quarter. It appears the usual seasonal slowdown was delayed by a quarter.
The good news for buyers is that prices for Intel chips will likely decline because of the inventory issue. About half of the inventory buildup was for flash memory and chipsets.
Buyers can expect the seasonal slow- down to end later in the third quarter as OEMs begin building for the fourth quarter, which is usually the strongest quarter for end equipment sales.
DRAM prices jump 21% in third quarter
10/22/2009Intel increases its Q1 microprocessor share
07/01/2008Intel sees strong demand
09/11/2007
Now Playing: 
