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Signs Point to Semiconductor Growth in 2010

Market researcher iSuppli takes a gander at how the chip industry is faring -- and makes some predictions about the year ahead. Though late 2009 began seeing signs of a turnaround, fears continued on worries about overexpansion. Fortunately, iSuppli has some reassuring news for the industry. Hardware Central has the story.

When the semiconductor market suddenly revved up and took off like a shot in the second half of 2009, there were as many concerns as there were cheers: What if the market gets oversold? Will customers be stuck with inventory? And if so, will they stop buying again like they did in late 2008?

As it turns out, the market is sustaining itself and poised to keep growing, according to two separate reports from supply chain market researcher iSuppli. The company found that distributors are keeping their inventories of chips low, a sign that all the chips they are buying are going right into products. The firm also said that it believes capital expenditures on fabrication equipment will go up this year.

Distributors controlled 36.9 Days of Inventory (DOI) at the end of the third quarter of 2009, down 15 percent from 43.4 DOI for the same time in 2008, according to iSuppli. In dollar terms, distributors held $4.8 billion worth of semiconductor inventory at the conclusion of the third quarter of 2009, down 22 percent from $6.1 billion for the third quarter of 2008.

Read the full story at Hardware Central:
Chip Industry Set to Maintain Momentum in 2010