Total inventory held by semiconductor suppliers declined significantly in the first quarter as excess stockpiles created during the global economic malaise of 2012 were cleared away, done in anticipation of a resurgence in consumer demand for electronic products expected by the second half of 2013.
Semiconductor makers' inventory in the first quarter declined to $37.6 billion, down 4.6 percent from $38.4 billion in the fourth quarter of 2012, according to a Supply Chain Inventory Brief from information and analytics provider IHS.
The decline in inventory paralleled the contraction in semiconductor revenues, which fell 5.1 percent sequentially, following the normal seasonal demand pattern.
"While overall chip revenue declined in the first quarter, falling inventories among chip suppliers-combined with expanding stockpiles at distributors, contract manufacturers and original equipment manufacturers (OEM)-indicate that consumer demand for electronics rose during the period," said Sharon Stiefel, analyst for semiconductor market intelligence for IHS. "This contributed to a decline in chip inventories. At the same time, semiconductor companies maintained tight control over their manufacturing capacity, contributing to the decline in inventory."