Distributors remain cautious about 1999 chip market

Distributors remain cautious about 1999 chip market
Richard Wilson
Distributors remain cautious about the prospects for the semiconductor market this year. Despite more confident predictions coming out of the US market, UK component distribution trade body Afdec expects a nine per cent decline in the value of semiconductor sales through distribution this year.
According to Afdec director Gary Kibblewhite: “The term cautious optimism is more relevant to 1999 than some of the double-digit growth figures currently being predicted for the industry.”
In an update on its previous forecast published in November, Afdec said that latest figures provided by its members showed that almost all the component categories for the last quarter of 1998 were worse than the figures for growth over the first three quarters of the year. “It will, however, be the first quarter result for this year that will be critical,” added Kibblewhite.
Another factor is the increased use of ship-to-stock practices by customers. “This could well expose overstocking at the customers and, as a result, precipitate short term falls in both bookings and billings,” he added.

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