December 5, 2025 05:33 AM GMT Semiconductors | North America Semiconductor Inventory Tracker: Starting to Budge Overall supply chain inventory improved in 3Q, declining more than typical seasonality. While the move toward historical trend is encouraging, inventory remains elevated amid ongoing geopolitical uncertainty, and we continue to expect a gradual return to normal levels. Key Takeaways Across the supply chain, overall inventory levels remain above historical trend, but declined in 3Q as customer and ...

Summary of Semiconductor Inventory Tracker Industry Overview - **Industry**: Semiconductors in North America - **Current Status**: Elevated inventory levels are being managed with a shift towards leaner strategies by customers and distributors, while producers are holding more inventory in anticipation of demand recovery [1][3][8]. Key Points Inventory Levels - Overall inventory levels remain elevated but decreased in Q2, with customer and distributor inventory declining more than seasonal expectations [3][12]. - Days of Inventory (DOI) across producers, distributors, and customers decreased by 5 days, more than the expected seasonal increase of 1 day [3][27]. - Customer and distributor DOI decreased below seasonal trends, while producer DOI remained in line with seasonal expectations [8][12]. Producer Insights - Semiconductor producers are holding 26 days more inventory than the 10-year median, but the sequential change aligns with seasonal trends [4][24]. - Memory segment DOI saw a significant decline of 22.3% quarter-over-quarter, driven by a 27.2% increase in Cost of Goods Sold (COGS) [4][59]. - Producers are cautious about replenishing distributor channel inventory, indicating a disciplined approach to inventory management [8][15]. Customer and Distributor Dynamics - Customer inventory decreased for all end markets except Communications and Consumer, with a notable decline in Storage and Computing/Mobile [12][16]. - Distributor DOI decreased by 7 days, now tracking 13 days above the historical median, indicating a leaner inventory strategy [11][21]. - The absolute dollar value of inventory across distributors decreased, with COGS increasing, leading to a decline in DOI for major distributors [11][55]. Market Trends and Challenges - Persistent macroeconomic uncertainty continues to disrupt normalized inventory levels, with producers planning to hold more inventory while customers engage in short-term ordering [3][8]. - The semiconductor industry is experiencing a structural shift towards higher inventory levels in anticipation of an eventual upcycle, despite recent declines in customer inventory [13][15]. - The overall DOI for the supply chain is still significantly above the historical median, indicating ongoing challenges in achieving stable inventory levels [27][29]. Future Outlook - There is potential for channel replenishment in the coming quarters, particularly for conservative companies, as distributor inventories lean out [11][15]. - AI secular tailwinds are expected to benefit memory companies, suggesting a positive outlook for certain segments within the semiconductor industry [15][59]. Additional Insights - The decline in DOI for Analog/MCU and Memory segments is seen as a constructive step towards recovery, despite the overall elevated inventory levels [9][15]. - The semiconductor industry is navigating through a complex landscape of inventory management, with varying trends across different segments and end markets [12][15][29]. This summary encapsulates the key insights and trends from the semiconductor inventory tracker, highlighting the current state of the industry and potential future developments.

Semiconductor Industry Conference Call Summary Industry Overview - The semiconductor industry in North America is experiencing elevated inventory levels, but there is a shift towards leaner inventory management strategies among customers and distributors due to tariff concerns [1][3][8] - Producers are holding more inventory in anticipation of a cyclical recovery, indicating a cautious approach to inventory management [1][3][8] Key Inventory Metrics - Overall inventory levels remain elevated but decreased in Q2, with customer and distributor inventory declining more than seasonal expectations [3][27] - Days of Inventory (DOI) across producers, distributors, and customers decreased by 5 days, which is more than the seasonal increase of 1 day [3][27] - Customer and distributor DOI decreased below seasonal trends, while producer DOI remained in line with seasonal expectations [8][27] Segment Analysis - Memory segment saw a significant DOI decrease of 22.3% quarter-over-quarter (q/q), driven by a 27.2% increase in Cost of Goods Sold (COGS) and a slight decline in absolute inventory [4][59] - Customer inventory decreased 3 days q/q, tracking below the seasonal increase of 2 days, with only Consumer and Communications segments showing increases [12][16] - Distributor DOI decreased by 7 days q/q, now tracking 13 days above the historical median [11][21] Market Dynamics - Persistent macroeconomic uncertainty continues to disrupt normalized inventory levels, leading to short-term ordering practices among customers [3][8] - Producers are practicing discipline in channel refill, holding back on replenishing distributor inventories [8][15] - The semiconductor industry is seeing signs of stabilization among customers and distributors after a prolonged period of de-stocking [13][15] Future Outlook - There is a strong likelihood of inventory replenishment in the coming quarters, particularly for conservative companies like ADI and NXPI, which could positively impact fundamentals [15][11] - AI secular tailwinds are benefiting memory companies such as SNDK and MU, indicating potential growth opportunities [15][11] Conclusion - The semiconductor industry is navigating elevated inventory levels with a cautious approach, focusing on leaner inventory management while anticipating a cyclical recovery. The dynamics of customer ordering and producer inventory strategies will be critical in shaping the industry's near-term outlook [1][3][15]