Report: Semi Recovery Not Result of Double-Booking
EL SEGUNDO, CA -- Despite fears that buyers are inflating semiconductor purchases in order to guarantee adequate supplies, there’s no indication that chip purchasers are engaging in double-booking, a leading research firm said today.
Double-booking is a phenomenon wherein buyers order much larger quantities of chips than they need, making the sales totals appear bigger than they really are. This situation can occur when electronics demand rises while inventories are low.Such circumstances in the past have cased purchasers to double book out of fear that they will be caught with short supplies, artificially boosting sales totals. This can later cause a sales letdown as orders are cancelled or scaled back.
However, this doesn’t appear to be the case in late 2009, according to iSuppli Corp., citing Texas Instruments, Intersil and STMicroelectronics as among those firms that have recently denied seeing the practice.
“In their earnings announcements, prominent semiconductor suppliers all reported they saw no signs of the dreaded double-booking phenomenon during the third quarter,” said Carlo Ciriello, analyst, financial services, for iSuppli. “This should give the semiconductor industry confidence that the magnitude of the current recovery accurately reflects real demand levels.” Furthermore, worldwide semiconductor inventories have been declining. When expressed in terms of revenue, global chip stockpiles fell 2.3% sequentially in the third quarter. These positive factors point to continued strength in the fourth quarter and a return to annual revenue growth in 2010. Worldwide semiconductor revenue is set to rise 3.5% sequentially and 10.6% year-over-year in the fourth quarter, the firm said. Global semiconductor revenue is set to rise 13.8% in 2010, following a 16.5% contraction in 2009. Read more...
