Chips' inventory-to-sales ratio hits near 26-year high amid sluggish demand

• Published date: 05 March 2023
• Publication title: The Korea Times

Inventory of Korean chipmakers has increased to a nearly 26-year high in January, data showed Sunday, reflecting the sluggish global demand amid the economic uncertainties.

The inventory-to-sales ratio of chips came to 265.7 percent in January, the highest since 288.7 percent posted in March 1997, according to the data compiled by Statistics Korea.

A higher ratio generally indicates that companies are facing more hurdles in selling their products, although the figure may rise when manufacturers stock up for large shipments.

A rise in the ratio may also induce chipmakers to reduce production or lower prices further to maintain sales.

Exports of semiconductors, the country's key export item, dived 42.5 percent to $5.96 billion in February from a year earlier amid the downcycle of the semiconductor industry.

With Asia's No. 4 economy depending highly on the chip industry...