March 18, 2009

Spot shortages due to franchised distributors reducing inventory

Converge General IC Update

Demand in February was softer than anticipated for general integrated circuits, as customers are working toward keeping inventories low while waiting until the last possible window to place orders. March has begun stronger; however, we are also tracking an increase in excess inventory lists being made available to the spot market.

Although activity decreased somewhat in February, we are tracking an uptick in demand for some Tyco connectors as well as increasing lead times on some Altera PLDs. Demand has remained steady for Freescale processors and some TI DSPs, while softening for PMC and Broadcom networking chips.

Opportunities remain strong for buyers looking to take advantage of available excess. However, we are starting to see isolated spot shortages, primarily as a result of franchised distributors working hard to reduce their inventory levels.

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