Yes, fabs are running at high utilization levels and CAPEX spends keep rolling in. Inventory management is great along the entire supply chain and most inventories are still seeing shortages, especially for ICs and some memory types.
So, the question begs, and has been raised a few times this quarter (including here in this recent MarketWatch Commentary), will we be hit with oversupply soon? The simple answer remains: NO. In fact, the shorts and inventory levels are believed to actually be a little misleading. No, not in the direction you might think, look what iSuppli recently said:
"At 69 days in the first quarter, DOI rose by 3.2 percent from 66.8 days during the fourth quarter of 2009. Such a DOI figure might give an impression—false, as it turns out that restocking is occurring, but the DOI is inflated because of near-record-high gross margins. By using both reported revenue and inventory value in the first quarter, and then adjusting Cost of Goods Sold (COGS) via the long-term average gross margin, DOI actually measures 20 percent lower than the seasonal average, iSuppli analysis indicates."
With utilization levels high, inventories lean and demand holding (and double ordering), we are seeing increased outsourcing all along the supply chain; whether at the fab level for chip supply, the EMS level for the manufacturing of devices, or the ODM level for the push to provide new devices and/or features to take part in the present CE, demand-rich cycle.
How long will this healthy rebound last for semi? Well, there has been quite a bit of chatter and serious analysis. The sum of it all: Semi and electronics more generally look very healthy and there's little reason to doubt the data we've been seeing come in for months now.
One cautionary note: what will happen in the wider macro-economic forum is actually the tricky question, and there should no longer be anyone out there doubting the tight coupling of semi to the macro arena.