December 17, 2008

Excess inventory becomes available earlier

Converge General IC Update

As with overall global economic conditions, the IC market slowed down a bit in November. Many customers have shifted their forecasts downward, and demand has softened up for many builds. We have also seen a number of excess inventory lists, and although it is not unusual to see excess inventory become available as we approach the end of the calendar year, these activities usually don’t take place until mid December.

Even with the end of the year and the economic slowdown, there are still areas where customers are experiencing delivery issues. We are still seeing quite a bit of activity on some Freescale processors, and lead times have extended out to 12-16 weeks for some products. We have also seen some activity on Altera, Tundra, Analog Device and Avago. These are mostly short-term needs and not anything prolonged, with the exception of Freescale shortages. Some Freescale parts, such as MPC8540, MPC8560 and MPC8280, have been tight for a few weeks, if not months.

We expect more slowdowns in December, especially mid-month and beyond, since many factories are closing for two weeks around the holidays. For customers who do have demand, there could be some good deals out there up until the New Year.

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