In the first half of this year, due to the impact of the Russian-Ukrainian war, the mainland city closure, and rising inflation, the operations of IC design manufacturers are generally not as good as expected at the beginning of the year. Under the cooling demand, the inventory level has risen rapidly, and the market is also highly concerned about the upcoming announcements of various companies. The amount of inventory and inventory turnover days in the second quarter of 2019 will guide the operation in the second half of the year.

The industry said frankly that since the fab utilization rate remained high in the first quarter, no manufacturer dared to arbitrarily reduce the production volume under the circumstance that "the enemy does not move and I do not move". Therefore, after the terminal demand slowed down in the second quarter, The ICs that were cast in the first quarter could only be converted into inventory because no customers were willing to buy them, resulting in a full inventory of upstream manufacturers.

Especially since 2020, IC design manufacturers have adopted a strategy of raising inventory since last year because they were afraid that there would be no chips to sell. As a result, the inventory level in the first quarter of this year has once again rewritten a record high, and there are many manufacturers with turnover days exceeding 100 days. As the inventory pressure continued to heat up in the second quarter, it naturally gave up the right to speak on the price and returned to the buyer's market.

The industry admits that at this stage, it is not only its own inventory, but the inventory level of the client, channel and consumer terminals is also high. It is estimated that it will be digested to the normal water level for at least 1-2 quarters, which means that the inventory will be prioritized throughout the second half of this year. Both shipments and prices have dropped, and operations in the second half of the year will decline compared to the first half of the year.

As for when it will be digested, the industry believes that the global economic environment is still the main focus of observation, especially at this stage, inflation has not peaked, and the consumer side is buying gas, and the short-term recovery will not be easy. We are now looking forward to the advance stocking tide for next year's Spring Festival.