UBS reckons the long winter for chipmakers may finally be thawing, with its latest global semiconductor distributor tracker pointing to the strongest signs yet of a market recovery as inventories stabilise and prices rise across almost every product line.
Monitoring stock levels and pricing trends at more than 100 electronics distributors worldwide, the tracker shows inventories up 1% in October, with prices climbing by a similar amount.
That may sound modest, but it marks the first broad-based price increase since mid-2023. UBS said it reflected both a healthier product mix and firmer demand after two years of heavy destocking.
The improvement is especially clear in microcontrollers (MCUs), where inventory digestion has slowed after months of drawdowns. Capacitors saw a 7% month-on-month increase, while other categories such as amplifiers and power management chips recorded small declines.
Prices, meanwhile, were up around 2% on the month and 15% year-on-year, helped by new product releases and stronger end-market activity.
UBS described the trends as “reassuring” and suggested that sentiment in the sector, particularly in the much-maligned analogue segment, could turn more positive into the year-end.
It sees the next report, due in November, as key to confirming whether the recovery is taking hold.
The bank’s preferred plays on the rebound are Texas Instruments Inc (NASDAQ:TXN), Infineon Technologies (ETR:IFX, OTC:INFNNY), Renesas and STMicroelectronics (NYSE:STM), a mix of US, Japanese and European names that it says are best placed to benefit as the industry returns to more normal inventory and pricing conditions.