IC Insights - Press Releases

Scottsdale, Arizona --- September 15, 2005 --- What causes an electronic systems manufacturer to begin adjusting its inventory level? How much inventory is too much? How far above the trend line do IC unit volume shipments need to be before a correction occurs? Unfortunately, there is no exact excess IC inventory ratio or figure that triggers a correction. However, there are some factors that IC Insights believes are worth discussing.

One factor that surely comes into play in determining whether an inventory correction is about to take place is the magnitude of the excess IC unit shipments. One of the gauges that IC Insights believes is very helpful is quarterly IC unit volume growth compared to the historical trend line.

Over the past ten years, IC unit shipments have registered a surprisingly steady CAGR trend --- about 9 percent. However, Figure 1 indicates that IC unit shipments began to depart from this trend line in 2Q05. IC Insights forecasts that 3Q05 IC unit shipments will reach about 10 percent above the long-term IC unit volume trend line before falling back toward the trend line in 4Q05 and even further down heading into 2006.

There does not appear to be a precise percentage figure that defines excess IC unit volume levels that cause an inventory adjustment. However, a significant plus-side departure (10 percent or more) of quarterly IC unit volume shipments from the trend line, coinciding with a slowing of growth (not necessarily a decline) in one or more major electronic system categories (e.g., PCs, cellular phones, etc.) are certainly two "triggers" for an IC unit inventory adjustment.

IC Insights will discuss these and other important trends at its second annual Fall IC Industry Forum to be held from 9:00am to 11:00am on September 22, 2005 at the Four Points by Sheraton Hotel in Sunnyvale, California. For more information call 1-480-348-1133 or visit www.icinsights.com/events/fallforum/fallforum.html.

IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the integrated circuit industry. Founded in 1997, IC Insights offers coverage of global economic trends, IC market forecasts, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of emerging markets for ICs.

> Home / In The News / Press Releases / September Release


	SEPTEMBER 15, 2005 RELEASE	Release
	3Q05 IC Inventory Build Underway Near-term consequences to be discussed at upcoming Fall Forum Scottsdale, Arizona --- September 15, 2005 --- What causes an electronic systems manufacturer to begin adjusting its inventory level? How much inventory is too much? How far above the trend line do IC unit volume shipments need to be before a correction occurs? Unfortunately, there is no exact excess IC inventory ratio or figure that triggers a correction. However, there are some factors that IC Insights believes are worth discussing. One factor that surely comes into play in determining whether an inventory correction is about to take place is the magnitude of the excess IC unit shipments. One of the gauges that IC Insights believes is very helpful is quarterly IC unit volume growth compared to the historical trend line. Over the past ten years, IC unit shipments have registered a surprisingly steady CAGR trend --- about 9 percent. However, Figure 1 indicates that IC unit shipments began to depart from this trend line in 2Q05. IC Insights forecasts that 3Q05 IC unit shipments will reach about 10 percent above the long-term IC unit volume trend line before falling back toward the trend line in 4Q05 and even further down heading into 2006. There does not appear to be a precise percentage figure that defines excess IC unit volume levels that cause an inventory adjustment. However, a significant plus-side departure (10 percent or more) of quarterly IC unit volume shipments from the trend line, coinciding with a slowing of growth (not necessarily a decline) in one or more major electronic system categories (e.g., PCs, cellular phones, etc.) are certainly two "triggers" for an IC unit inventory adjustment. IC Insights will discuss these and other important trends at its second annual Fall IC Industry Forum to be held from 9:00am to 11:00am on September 22, 2005 at the Four Points by Sheraton Hotel in Sunnyvale, California. For more information call 1-480-348-1133 or visit www.icinsights.com/events/fallforum/fallforum.html. Figure 1 About IC Insights IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the integrated circuit industry. Founded in 1997, IC Insights offers coverage of global economic trends, IC market forecasts, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of emerging markets for ICs.
	About Us \| Products & Services \| In The News \| Events & Presentations \| Support & Guestbook \| Useful Links Copyright © 2002-2006 IC Insights, Inc. All rights reserved. Site problems/comments: .