Holidays Bring Good Cheer to ChipmakersBy Jessica Davis | Print
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Supply chain checks into Asian chip distributors are showing greater than expected strength as companies prepare for stronger than expected shipments of consumer products and smartphones.
Anyone who sells into the consumer market knows that the Christmas rush time is crucial to the success of the entire year. That’s why it’s good news that chip distributors are reporting better than expected numbers for the fourth quarter, according to FBR Research.
The firm says that recent checks with Asian chip distributors suggest a chip shipment decline of 4 percent to 8 percent sequentially, better than the previously expected 10 percent sequential decline.
FBR Research says the unexpected strength was driven by strong industrial, consumer and smartphone chip orders in November.
"A robust Golden Week holiday required downstream OEMs to place rush orders for Christmas and required downstream OEMs to place rush orders for Christmas and provided confidence to begin placing orders for Chinese New Years," the firm writes in a brief report.
The firm adds that Asian distributor inventories fell and product lead times contracted modestly in late November.
"We think shorter lead times are a healthy industry positive that could eliminate customers' desires to double-order product or build excess inventories," the firm writes.
Consumer and smartphone markets were the strongest in November while PC notebook shipments fell less than expected.
Companies that saw particularly robust shipment growth included Marvell, Atheros, AMD, Nvidia, Sandisk, Samsung, Freescale, and Hitachi, according to FBR Research.