Semiconductor market poised for rebound, say research firms

Equipment makers dip into excess inventories to meet expected demand

The worldwide semiconductor market appears to be poised for a turnaround, according to recent figures released by Gartner and IHS.

Gartner found that quarterly revenue figures of semiconductor equipment manufacturers are beginning to improve. The "book-to-bill ratio indicates that spending for equipment will pick up later in the year," commented Bob Johnson, research vice president at Gartner.

"Looking beyond 2013, we expect that the current economic malaise will have worked its way through the industry and spending will follow a generally increasing pattern in all sectors throughout the rest of the forecast period," Johnson added.

Gartner forecasts that semiconductor capital spending will increase 14.2 percent next year and 10.1 percent in 2015. This compares with two consecutive years of revenue declines in 2012 and 2013.

According to IHS stats, the inventory of semiconductor manufacturers fell in the first quarter, suggesting that excess stockpiles are being cleared in response to a resurgence in demand for electronics by the second half of this year.

Semiconductor inventory declined to $37.6 billion in the first quarter, down 4.6 percent from $38.4 billion in the fourth quarter, IHS found.

"While overall chip revenue declined in the first quarter, falling inventories among chip suppliers--combined with expanding stockpiles at distributors, contract manufacturers and original equipment manufacturers--indicate that consumer demand for electronics rose during the period. This contributed to a decline in chip inventories. At the same time, semiconductor companies maintained tight control over their manufacturing capacity, contributing to the decline in inventory," said Sharon Stiefel, analyst for semiconductor market intelligence at IHS.

Both Gartner and IHS are predicting growth in the semiconductor market to return in the second half of this year and into 2014.

For more:
- check out Gartner's stats
- see IHS' figures

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