EL SEGUNDO, CA -- Global inventories held by semiconductor suppliers surged to a 30-month high during the fourth quarter, a development that could spell trouble if chip industry growth loses steam this year, IHS iSuppli warned today.

As of Dec. 31, semiconductor suppliers held 83.6 days worth of inventory (DOI), up 5.5 days sequentially. The last time the DOI was this high was June 30, 2008, or just before the last semiconductor downturn.

IHS iSuppli had forecast stockpiles would fall by 2.5 days in the quarter.

"Inventory levels arguably now are high by any standard, illustrating the difficulty of controlling chip stockpiles despite the arduous efforts of semiconductor suppliers to keep them in check. The sharp increase during the fourth quarter of semiconductor inventory defied expectations of a decline for the period, but the inflated level of inventory could become a concern if semiconductor industry growth falls short of expectations in 2011," wrote analyst Sharon Stiefel of IHS.

IHS iSuppli currently predicts 5.6% growth in 2011, and says inventory levels should be manageable at that growth level. Lower growth could lead to oversupply and rapid deflation in chip prices, which in turn could "amplify" the size and duration of a semiconductor downturn or slowdown, the firm said.

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