SUPPLY ISSUES: Analysts said inventory was with distributors for six to seven months, worse than market expectations of five to six and the usual two to three

Taipei Times
Date: Dec 17, 2018
By: Lisa Wang  /  Staff reporter

Multi-layer ceramic capacitor (MLCC) supplier Yageo Corp (國巨) is expected to see further downward revisions for its earnings and share price, as an abrupt dip in demand has prolonged absorption of exceptionally excessive inventories in its supply chain, Morgan Stanley said in a report.

Original equipment manufacturers and electronics manufacturing service providers snatched up MLCCs in preparation for the holiday shopping season in the second half of this year, as a scarcity of supply jacked up prices over past six quarters, the investment bank said.

“Our channel checks suggest more inventory sitting at the distributors for six to seven months, worse than the market expectation of five to six months and the usual two to three months,” Morgan Stanley analysts led by Howard Kao (高燕禾) said in a report released last week.

However, market demand slumped unexpectedly in September as US-China trade tensions depressed demand for end products, uch as smartphones, PCs and other consumer electronics, the analysts said.    [FULL  STORY]