Analog Chip Inventories 10%-20% Higher Than Normal

Thursday, Robert W. Baird chip analyst Tristan Gerra asserted in a research note that meetings with Asian component suppliers found very weak conditions in the cell phone market.

In a follow-up note Friday, Gerra says that analog chip inventories are running 10%-20% higher than normal in the channel. He says inventories are high, in particular, for STMicroelectronics (STM), Fairchild Semiconductor (FCS) and for Texas Instruments (TXN). This time, he blames not only “across-the-board weakness in mobile phones” but also PC order reduction late in the fourth quarter.

Gerra says “there is evidence of analog products being pushed to distributors who cannot refuse the products.” (Who is doing that…Corleone Semiconductor?)

“Net, while mobile phones is clearly the end market where the data points are the most negative, data pertaining to other end markets outside of PCs is also pointing to weakness below seasonality, particularly for broad-based commodity semiconductors,” he writes.

STMicro shares Friday were up 9 cents to $19.04; Fairchild was down 24 cents at $17.40; TI was down 25 cents at $31.32.

FCS vs. STM vs. TXN 1-yr chart