News Article

VLSI Predicts 2010 As Excellent

VLSI Research predicts 2010 will be a great year for chipmakers



All major semiconductor makers have reported better than expected results in recent weeks. Risto Puhakka, a senior analyst with VLSI Research Inc. is not surprised: “even memory suppliers are using the “P" word. They were either already profitable in the third quarter or are expecting to be profitable in the fourth quarter." The great capex famine that started in 2008 has done wonders for chip pricing. Low capital expenditures aged fabs faster.  Inventories quickly burned off. Since then inventories have been very low, resulting in chip shortages in 3Q09 as seen by increasing lead-time push-outs, as noted in recent reports from companies such as Nokia.

While some have reported high inventories, which have risen for much of the year, VLSI recently reported in The Chip Insider, that they are actually low by historical standard, pointing to the Inventory to Billing Ratio as the correct measure of inventories. VLSI’s preliminary data for September’s inventories equaled only one month of IC billings. VLSI’s G. Dan Hutcheson says, “the I:B ratio is very low compared to data stretching well back into the early eighties." When asked about the rise in inventories, he said, “It’s not surprising to see inventories rise since the semiconductor industry normally moves into the critical Christmas production ramp in the summer months. The reported chip shortages tell you there’s not enough inventory in the supply chain for the fourth quarter."

Hutcheson says low capex last year resulted in a diminishing production capacity base which led to high utilization rates recently, as chip makers tried to catch up with a turnaround in end demand, which actually started last January. It took some time for industry executives to be convinced it wasn’t just a bump. So, lower capacity combined with low inventories is likely to continue to keep chip prices high, which will make for a very good year for chipmakers in 2010.

CS International to return to Brussels – bigger and better than ever!

The leading global compound semiconductor conference and exhibition will once again bring together key players from across the value chain for two-days of strategic technical sessions, dynamic talks and unrivalled networking opportunities.

Join us face-to-face between 28th – 29th June 2022

  • View the agenda.
  • 3 for the price of 1. Register your place and gain complementary access to TWO FURTHER industry leading conferences: PIC International and SSI International.
  • Email  or call +44 (0)24 7671 8970 for more details.

*90% of exhibition space has gone - book your booth before it’s too late!


Search the news archive

To close this popup you can press escape or click the close icon.
Register - Step 1

You may choose to subscribe to the Compound Semiconductor Magazine, the Compound Semiconductor Newsletter, or both. You may also request additional information if required, before submitting your application.

Please subscribe me to:


You chose the industry type of "Other"

Please enter the industry that you work in:
Please enter the industry that you work in:
Live Event