Inventory up, fab utilization to fall in 3Q23
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Total IC inventory in the global chip sector is expected to climb and IC manufacturing capacity utilization is expected to fall in 3Q23, according to industry body SEMI.
SEMI has worked with TechInsights to produce an outlook for the chip industry that is reported in SEMI’s Semiconductor Manufacturing Monitor.
Total IC inventory (US$bn) versus IC manufacturing capacity utilization (%). Source: SEMI.
While the amassed inventory will tick upward to approaching $70 billion the average wafer fab utilization will drop from just under 80 percent in 2Q23 to just about 70 percent in 3Q23. These are indications of continued headwinds for chip manufacturers in the 2H23.
However, chip sales are expected to show a modest sequential increase in 3Q23, the second such increase after three quarters of sequential falls. Another piece of good news in 3Q23 is that electronic equipment sales are expected to show quarter-on-quarter growth of 10 percent.
The report reckons that the semiconductor industry has started to recover and this is setting the stage for a growth in 2024.
“The slower-than-expected demand recovery will delay the normalization of inventory until the end of 2023, later than we previously anticipated, leading to additional reductions in fab utilization rates in the short term,” said Clark Tseng, senior director of market intelligence at SEMI. “However, recent trends suggest that the worst is over for ICs. We anticipate semiconductor manufacturing will bottom in Q1 2024.”
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