Semiconductor Inventory Decline Suggests Strong PC and Mobile Sales on the Horizon

A recent development in the semiconductor market is leading analysts to foresee a big season ahead for mobile device and PC vendors.
Research firm IHS noted that inventory levels among semiconductor device manufacturers dropped in the early months of 2013. The company said that while revenues declined slightly following normal seasonal patterns, the number of devices on hand with the manufacturers who purchase semiconductors suggests that mobile handset, tablet and PC vendors are gearing up for a big sales push in the back to school and holiday shopping seasons.

Photo Credit: v3.co.ukAnalysts noted that the drop in semiconductor stockpiles combined with growing levels of inventory further down the supply chain indicate that more devices are being built and set to ship to retailers in the coming months.
Because semiconductor vendors directly supply the companies that build devices, trends in the market can serve as an early predictor for how the PC and mobile device markets will be faring in subsequent months.
Earlier this year, researchers warned that semiconductor vendors were seeing their inventories grow to worryingly high levels amidst weak interest. Through a combination of better supply management and an brighter economic outlook amidst vendors, chipmakers have been able to move their stock.   READ MORE

Broadcom CEO Sees Consolidation Ahead In Mobile-Chip Sector

Consolidation is ahead for the wireless semiconductor sector, according to the chief executive of chip maker Broadcom Corp. (BRCM), with many companies likely to face either a financial or technological squeeze.

Scott McGregor, speaking at an investor conference, said the high cost and difficulty of developing new processors for smartphones and tablet computers will cause many chip makers to exit the market.

He said companies fall into one of four categories–those that have the money and technology to create products, those that have the technical capability but don’t have the cash, those that have a lot of money but not a lot of technology, and startups or companies without much scale. McGregor said he believes there are only about a handful of companies that can offer a complete product to customers.

“Some people are going to give up, some people will sell out and some people will continue to push forward,” he said.

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