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Chip Production Lead Times Shrink As Cyclical Downturn Takes Shape

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A semiconductor.

The semiconductor industry is working through excess inventories of memory chips and PC processors, which are in a cyclical downtrend. Industrial, automotive, and communications chips have yet to correct.


Semiconductor lead times shrank by a significant amount in October, a sign that a broader chip-cycle downturn could be coming. Concerns about a downturn have hammered semiconductor stocks this year.

In October, semiconductor lead times fell six days to 25.5 weeks, Susquehanna Financial Group analyst Christopher Rolland said in a note to clients Thursday.

"This is the largest contraction yet this cycle, and the second consecutive meaningful decline in a row," Rolland said.

It's also the largest contraction since Susquehanna started collecting data on chip lead times in 2016. Lead times measure the time between a customer placing an order and receiving the product.

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