Thursday, July 3, 2003
While shipments to replenish component reserves reduced inventory in the supply chain by nearly 75% in the first quarter of 2003, suppliers are still holding 98% of the excess -- about $1 billion worth of parts, according to iSuppli Corp.
The El Segundo, Calif. research firm tallied the overall component surplus at just $300 million at the end of March, down from $1.2 billion at the end of 2002, but only because severely depleted inventory in other segments of the supply chain offset suppliers' bloated levels, said iSuppli analyst Greg Sheppard.
"The chip guys were definitely left holding the bag," he said.
EMS and distributors continued to replenish inventory in the second quarter, which may help work down some of the remaining stockpile, but the impact of Severe Acute Respiratory Syndrome on demand for mobile phones and PCs could put another crimp in the supply chain, Sheppard said. Second-quarter data is still being compiled.
"Shipments in Q2 were hurt by SARS, but we could see somewhat of a snapback in Q3," he said. "Suppliers need to be real careful about how they react. Is it real demand, or just getting back to normal production levels?"
By: DocMemory
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