Morgan Stanley: A Rise in ‘Double Ordering’ at Chip Companies
NEW YORK – A new survey from Morgan Stanley highlights the broad risk facing many chip companies from a rise in double-booking.
The survey of electronics distributors by the financial services company implies more customers are placing multiple orders for the same part, then canceling all but one of the orders later.
“Commentary from the survey points to double-ordering activity, as well as an elevated level of supply constraints and lead times,” said Morgan Stanley analyst Joseph Moore.
The analyst added that the practice has gone on for a number of quarters, making it difficult to time the turning points in the cycle.
The survey also shows 70% of distributors think chip sales were up sequentially in the first quarter, compared to 57% who predicted growth in the first quarter of 2017.
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