So wrote Carter Shoop, an analyst with Deutsche Bank Equity Research, in a research note. He added that other contacts at component makers and distributors seemed more cautious.  

“We believe the differing views stem from a larger inventory workdown in capacitors and semiconductors versus connectors. Connectors tend to be more application specific and have more stable lead times than capacitors and semi's, resulting in less volatility throughout a cycle,” he wrote.

For the current quarter, demand for military and aerospace electronics are slightly ahead of forecasts, while industrial and handset products are off.

Meanwhile, industry-wide inventory reduction has accelerated, with several contacts observing a “meaningful reduction” at top tier EMS vendors in October. Efforts are expected to continue through at least December.  

DB had previously estimated global EMS and ODM companies had about $3 billion worth of excess parts in inventory. “As a consequence of moderating end-demand, bloated inventories and contracting lead times, we believe EMS and distribution vendors, in aggregate, will reduce component inventories over the next two (possibly three) quarters on an absolute basis.”

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