SAN FRANCISCO (AP) -- Semiconductor companies will maintain such thin inventories in the first quarter that they will be "bordering on shortages" for some devices, market research firm iSuppli Corp. said Tuesday.
The inventories are expected to be about 7 percent less than the historical average, but should be about even with demand, iSuppli said.
Chip makers have been whittling down their stockpiles as the recession sapped demand from computer and gadget makers for new chips. Now that demand is picking up in some areas, they are keeping inventories low to "maintain profitability amid uncertain economic conditions," iSuppli said.
The firm said stockpiles will be at "very low levels -- even bordering on shortages for a few specific devices."
"Despite a very poor 2009 for the semiconductor industry, chip suppliers managed their inventories deftly during the year," said Carlo Ciriello, an iSuppli analyst. "The key for semiconductor suppliers in 2010 will be to capture revenue opportunities without double booking or overstocking. Those suppliers that successfully manage lead times and read the tea leaves of demand will reap the benefits of rising revenue and expanding market share."
