It appears that PC component makers have take the lessons from the dot-com bust to heart. After the tech economy collapsed on itself a decade ago, many firms were left with swollen inventories of equipment that would soon become obsolete.
Determined not to make the same mistakes again, many hardware suppliers have kept a tight lid on production, despite a recent resurgence in PC sales. Hardware Central has the story.
Despite a sizable improvement in PC sales during the fourth quarter of 2009, computer component makers remain leery of economic conditions and are still reluctant to let their assembly lines roll, keeping product supplies and inventories very tight.
That’s according to a wealth of new research from industry observers like iSuppli and Broadpoint AmTech. Despite days of inventory (DOI) being at their lowest point ever, and the fact that many OEMs were buying supplies to build product, not expand their inventory in 2009, component manufacturers — makers of LCD panels, memory, semiconductors, hard drives, and the like — are keeping production very low. And they’re likely to do so for the immediate future.
The reason why is that vendors remain extremely cautious over being left holding outdated inventory, a problem that hurt the industry badly a decade ago when the dot-com bubble burst. The economy slipped into recession while vendors kept building product. The result was a supply chain stuffed with old products no one wanted to buy. Some serious write-offs were taken back then, and they left the survivors of that time very gun-shy.