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Chipmakers Combat Shortage With Record Inventory

Inventory at the world’s nine biggest chipmakers has hit record highs as the industry battles against the global semiconductor shortage.

As reported in Nikkei Asia, total stock at the leading chip manufacturers – TSMC, Intel, Samsung, Micron Technology, SKHynix, Western Digital, Texas Instruments, Infineon, and STMicroelectronics – has hit $64.7 billion USD ($90.4 billion AUD), with foundries desperately moving to ramp up production in the face of the global chip drought.

Turnover for the June quarter hit a rate of 7.8, the highest in 18 months, as 5G technology and increasing digitisation fuel an insatiable appetite for semiconductors; at the same time, the coronavirus pandemic means foundries have had to shut down in Southeast Asia.

In an earnings call with investors, TSMC CEO C.C. Wei says semiconductors are becoming ever more pervasive thanks in part to COVID-19.

“We are witnessing a structural increase in underlying semiconductor demand as the multiyear megatrend of 5G- and high-performance-computing related applications are expected to fuel massive increase in computation power and greater need for energy-efficient computing, which will require leading-edge technologies,” said Wei.

The frantic pace of manufacturing, however, has led some chipmakers to grow concerned about a potential glut once the demand eases off, with memory chip manufacturers already seeing signs of a slowdown.

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