Global chip inventories continue to collect, and industry interpretations divided

According to the latest report, the world’s major chip makers are accumulating inventories of finished goods at an accelerating pace, a phenomenon that has sparked industry concerns.

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Although several interviewed companies all told Bloomberg that such inventory growth is in response to strong downstream demand and to avoid supply problems, manufacturers generally have optimistic expectations for downstream demand, believing that semiconductor products are accelerating penetration outside the traditional consumer electronics field. A fragmented demand market is less prone to sudden changes in demand.

However, some analysts told the agency that the accumulation of manufacturers’ inventories is often a precursor to the turning point of the industry cycle. Shortly after the accelerated growth of inventories in 2018, there was a staged recession.

In the capital market, the Philadelphia Stock Exchange Semiconductor Index (SOX) has continued to fall so far in 2022, with a significantly larger decline than the broader market over the same period.

(via)