© Reuters Semiconductor Inventories Rising Across the Board – Morgan Stanley

By Sam Boughedda

Morgan Stanley analyst Joseph Moore told investors in a note Monday that recent data has shown semiconductor inventory has increased meaningfully across the entire supply chain.

Companies across various industries are still citing the supply chain as their most significant challenge. This has, according to the analyst, driven large builds of inventories through the pipeline.

“While 1Q is seasonally a growth quarter for inventory, this year we saw growth exceed seasonality with each area that we track showing an increase in days of inventory,” wrote Moore.

Last quarter, the analyst said inventory was at all-time highs at customers, distributors, and semi companies on a $ basis, and he explained that it is once again, the case.

However, Moore says that “while semi company and customer inventory levels have remained above historical levels, distributor inventory has been quite depleted since the local minimum in 4Q20, and just this quarter rose relevantly above that level.”

“That means that while overall inventory has been elevated for some time, this is the first quarter where every section of the supply chain is above historical levels.”

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