Semiconductor industry will recover in 2020

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While the semiconductor industry will post single-digit growth in 2020, buying conditions will favor semiconductor purchasers as there will be ample capacity to meet demand – By James Carbone

electronics-sourcing.com, Dec. 23, 2019 – 

Buyers can expect plentiful supply, normal lead times and price declines for most integrated circuits and discretes in 2020, despite stronger chip demand and lower inventory levels compared to 2019.

While many semiconductor manufacturers have cut back on capital expenditures, there's still ample capacity for manufacturing expansion that occurred in 2018. The capacity that was added resulted in semiconductor inventory levels growing last year as shortages of some memory ICs and discretes were mostly eliminated.

Inventory levels fell back half in the second half of 2019, but there still is some excess inventory that has yet to be worked off. As a result, unless there is a huge spike of demand that continues for months, there should be more than enough supply to meet demand, especially in the first half of 2020, according to analysts. Prices for many chips should decline and lead times should not be a problem in 2020. Chip buyers can expect price erosion for memory ICs, analog chips, sensors, optoelectronics and discretes in 2020.

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