What They Say
Earlier this week, DSCC published a blog article characterising the inventory issues in the supply chain as acting like a “Gale-Force Headwind for Display Industry” and the Nikkey reinforced this idea by reporting that Samsung has told its suppliers that it is closely reviewing its component and final product inventories. The categories affected include TVs and smartphones as well as home appliances. Procurement reduction is likely to last until July.
The DSCC article was triggered by comments from Target, a US retailer, which is running promotions to clear current inventory to re-stock with more popular items. The article looks at the impact of inventory, payables and receivables for Best Buy, Amazon and Walmart. The company then looked at inventories for the top three TV brands and finally at the value of the inventories of FPD makers. In the TV brands, Sony and LG looked reasonably stable, but Samsung’s days of inventory have gone up from typically between 60 and 80 days to almost 100. In panel makers, inventory was especially high at BOE (72 days), China Star (70 days) and LGD (67 days) and that overall, the FPD industry has about two weeks of excess inventory at the end of Q1 (based on a typical level of 56 days).
What We Think
Retailers have been tending to over order or buy products that may have not been the first choice during supply chain shortages and delays. (BR)
Best Buy’s finances are broadly similar to other retailers, with inventory rising.
FPD Inventories have been rising for panel makers.
