STMicroelectronics is the latest chip supplier to put numbers to how much inventory it has taken out of its supply chain.
CEO Carlo Bozotti said during a Q1 results call that it had reduced inventory levels by $184m and that there may be further cuts in the pipeline.
These are difficult days for chip manufacturers like ST. It reported a loss of $541m in Q1 on sales which were 33% down year-on-year.
These are bad numbers by any measure. The Q1 loss figure showed deterioration on the $366m loss figure from the last quarter of 2008.
But inventory cuts must be a positive sign for the supply chain.
Infineon was another chip maker announcing inventory cuts during its Q2 results.
The hope is that this latest quarter is last of the really bad corporate news and the market will be looking for better numbers in June.
That is certainly the hope of distributors like Avnet and Arrow which have seen falling Q1 sales, but who are also trying to call the bottom of this market.
The size of inventory cuts coming from the likes of ST and Texas Instruments, earlier in the month, are the only really positive signs that the bad times will have a finite duration and the turning point cannot be too far away.
Leave a comment