Prices for transistors, analog chips to stabilize as demand rises
iSuppli says price for analog-monolithic semiconductors will decline 3.9% in the second quarter
By James Carbone -- Purchasing, 6/18/2009 2:00:00 AM
Buyers can expect stable prices for transistors and analog semiconductors in the second half as demand picks up, according to researcher iSuppli.
Prices had been declining since the fourth quarter of last year. The average worldwide contract price for analog-monolithic semiconductors will see a decline of 3.9% in the second quarter, compared to 7.8% in the first quarter and 4.6% in the fourth quarter of 2008.
Prices in the third quarter will rebound slightly, rising by 0.7% as demand rises, according to iSuppli.
Transistor prices will decrease by 3.8% in the second quarter, a sharp reduction from a 9% decline in the first quarter and a 7.3% reduction in the fourth quarter. The rate of transistor price erosion will dwindle to 0.2% in the third quarter and to a mere 0.04% in the fourth quarter.
One major factor influencing pricing in the industry is the level of inventory. Inventories had swelled last year, but the electronics supply chain managed to reduce its stockpiles significantly in the first quarter despite weak demand, says iSuppli. The reduction will help stabilize prices.
"While demand is rising, it will be a while before the analog and transistor markets recover to 2008 levels," says Marijana Vukicevic, senior analyst for power management at iSuppli. "Analog and discrete suppliers are reporting improvements in book-to-bill ratios, but the overall order visibility remains low—anywhere between two and three weeks depending on the customer and the end product," she says.
With analog and transistor revenue rising, utilization rates at fabs producing these products are increasing as well. Utilization rates for analog and transistor fabs in the first quarter were in the low 40% range. In the second quarter, utilization is expected to increase to the 60% level.
Rising utilization is expected to contribute to stable prices.
Now Playing: 
