April 3, 2012 — Semiconductor lead times decreased at the end of February 2012, reports analyst firm Gartner Inc. Although Gartner still expects the semiconductor industry to grow in 2012, Q1 showed some signs of softness.
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| Figure. Selected lead times at semiconductor distributors. SOURCE: Gartner Inc. |
Revenues at semiconductor vendors were down in Q4 2011, while inventory rose. Semiconductor lead times were at their shortest in December 2011, steadily rising through the reporting period (to February 6, 2012). The average of minimum lead times peaked (8 weeks) on February 8, 2012 after a steady climb (about 2.5 weeks) from its low point (5.4 weeks) on December 28, 2011.
The lead time index, which is more sensitive to changes in lead times across all distributors, peaked at 10.8 weeks on February 8, 2012 and was down to 10.3 weeks on February 22. Despite fluctuations in lead times — seen as the market recovers from excessive inventory — the market shows improved health, Gartner says. This conclusion is supported by the slower trend downward after February 8, 2012.
The semiconductor inventory correction identified in Q4 2011 should be nearly complete by the end of Q1 2012. The first quarter is typically is a down quarter for sales.
More on semiconductor inventories:
Chip inventories contract, reversing 7 quarter trend and Semiconductor inventories coast at record levels into 2012.
Expect lead times to rise as the wireless semiconductor supply chain normalizes after the inventory correction. Gartner sees volatility in lead times for some parts, and this may result in minor delays or hiccups in the process. Gartner’s lead time index reflects market demands and conditions.
Manufacturers should watch for increases in demand and monitor changes to their inventory levels and lead times to best match and anticipate purchasing needs.
View Market Trends: Semiconductor Lead Times Slip Lower in February 2012 at http://www.gartner.com/DisplayDocument?doc_cd=228553.