Hi-tech inventories way up
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Manufacturing News, Source : The Manufacturer US
Published : 23 Oct 2006 14:28
Industry think-tank Manufacturing Insights has tracked a sharp spike in hi-tech inventories. The group believes that suppliers are filling the pipeline for what it expects to be a very lucrative holiday season.
True, but analyst and Program Director Bob Ferrari has other explanations. “There has been a definite build-up of inventories in the semiconductor sector, which may be spilling over to the assembly components sector. Some are attributing this build-up to Intel's current difficulties,” which slowed purchases by the giant OEM. “Others attribute it to over optimistic demand forecasting for products related to the past World Cup competition.”
An interesting point - with an average TV audience of 93 million viewers for each match over a monthlong period, those manufacturers reached a viewership equivalent to 64 Super Bowls, according to global advertising conglomerate the Interpublic Group. Those viewers simply didn’t buy as expected.
“In my mind, the high tech industry is struggling with the new paradigm of being more consumer electronic driven,” says Ferrari, and is likely struggling with its different models and demands. .
The Manufacturing Insights Global Performance Index (GPI) tracks growth metrics from 800+ publicly traded global firms in the manufacturing and retail industries. This chart shows the latest total inventory trends in the high tech industry, and in particular shows the large increase in inventories in Q2 2006 for High Tech Suppliers. This jump was led by electronics manufacturing services (EMS) providers followed closely by semiconductor manufacturers, as four large companies in the index had 20 percent or more growth in total inventories between Q1 and Q2 of 2006.
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