NEW YORK, NY – Morgan Stanley highlighted the broad risk facing many chip companies, including Analog Devices, from a rise in “double ordering.”

A recent Morgan Stanley survey of electronics distributors implies more customers are placing multiple orders for the same part, then canceling all but one of the orders later, according to reports.

Moore said it's difficult to time the turning points in the cycle because double ordering concerns over the end of the cycle have gone on for a number of quarters.

"Commentary from the survey points to double ordering activity, as well as an elevated level of supply constraints and lead times, particularly in Analog and MCU," said Morgan Stanley analyst Joseph Moore.

The survey also shows 70% of distributors think chip sales were up sequentially in the first quarter, compared to 57% who predicted growth in the first quarter of 2017.

"…we think the upside for broad-based suppliers will be more measured in contrast to significant beats/raises in 2017, which could begin to dampen enthusiasm for putting new money to work."

• Prev
• Next