TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      Fixing SA’s power crisis is not complex: it simply takes the will to do better

      12 August 2022

      Consortium makes unsolicited bid for state’s 40% stake in Telkom

      12 August 2022

      Actually, solar users should pay more to access the grid – here’s why

      12 August 2022

      Telkom says MTN talks remain on track

      12 August 2022

      Analysis | Rain muddies the waters with approach to Telkom

      11 August 2022
    • World

      Tencent woes mount, even after $560-billion selloff

      12 August 2022

      Huawei just booked its first sales rise since US blacklisting

      12 August 2022

      Apple remains upbeat about iPhone sales even as Android world suffers

      12 August 2022

      Ether at two-month high as upgrade to blockchain passes major test

      12 August 2022

      Gaming industry’s fortunes fade as pandemic ends

      11 August 2022
    • In-depth

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022
    • Podcasts

      Qush on infosec: why prevention is always better than cure

      11 August 2022

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022
    • Opinion

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Sections»Consumer electronics»Companies are stockpiling chips, with serious implications

    Companies are stockpiling chips, with serious implications

    Consumer electronics By Tim Culpan14 October 2021
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    TSMC’s head office in Taiwan. Image: TSMC

    Global orders for semiconductors keep rolling in, but the latest data from the world’s biggest chip maker hints that this strong demand is beginning to look like industry stockpiling. That could be a massive problem when supply-chain bottlenecks ease.

    Taiwan’s TSMC on Thursday announced record profits thanks to orders for clients such as Apple, Nvidia and AMD. This optimism will continue for the foreseeable future, with the company expecting full-year growth of 24%.

    But a large amount of those orders aren’t going towards satiating global hunger for gadgets, connected cars and burgeoning server farms. Inventories at the Hsinchu-based company jumped 66% by the end of September from a year prior, the fourth straight quarter in which this figure climbed more than 65%. Days of inventory, another metric used to benchmark how much product is sitting on shelves, stayed high at 85 days.

    Global bottlenecks are forcing customers to put in bigger orders than normal to avoid being caught short

    TSMC is not unaware of the situation, and doesn’t expect it to ease up. CEO CC Wei told investors that he continues to expect customers and other companies in the supply chain to build inventory through to the end of the year and maintain higher levels for a longer period of time. The implication being that TSMC isn’t alone in creating stockpiles, with the rest of the industry also filling shelves with chips as fast as possible.

    This is a worry. More than half of the company’s revenue comes from its two most advanced production nodes. And as a general rule, the newer the technology, the shorter the shelf life: Clients who require the latest and greatest chips need to keep upgrading.

    Nasty indigestion

    But global bottlenecks are forcing customers to put in bigger orders than normal to avoid being caught short if logistical hiccups result in fresh supplies being unable to reach their destination. There are many sectors where products can be stockpiled without much risk, such as coal, grains and even older electronics components. At the leading edge of the chip sector, though, products can become redundant within six months and clients know it. If any of them start to see end-demand falter, then there’s a high likelihood they’ll sharply cut orders so they can digest the stockpiles they’ve already built.

    Even as the world continues to grapple with chip shortages, it’s now time to be on the lookout for a clearing of that backlog where insatiable hunger might quickly turn to nasty indigestion.  — (c) 2021 Bloomberg LP

    CC Wei TSMC
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleMantashe opposes coal ban for climate aid
    Next Article Microsoft shuts down LinkedIn in China

    Related Posts

    Fixing SA’s power crisis is not complex: it simply takes the will to do better

    12 August 2022

    Consortium makes unsolicited bid for state’s 40% stake in Telkom

    12 August 2022

    Actually, solar users should pay more to access the grid – here’s why

    12 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    Get your brand in front of TechCentral’s amazing audience

    12 August 2022

    Pricing Beyond CMYK: printers answer the FAQs

    11 August 2022

    How secure is your cloud?

    10 August 2022
    Opinion

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.