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  "documentTitle": "Semiconductor shortage: A different kind of trouble ahead",
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  "notes": "The chart shows a trend line of inventory-to-sales ratios from 2012 to 2021, with a projected drop.",
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      "text": "Current record high inventory needs be corrected as demand softens and bullwhip effect could lead to unfavorable financial consequences",
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      "text": "The aggregate average inventory to sales ratio for the select 22 EMS, [%]",
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      "text": "Excess ordering had a significant impact on increasing chip shortages in the last two years. Now, as global demand for chips decreases, there is an elevated risk for a bullwhip effect. To avoid an unfavorable financial situation, or even scrapping stocks, manufacturing companies must take action to ready their inventories for tomorrow.",
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      "text": "Many automotive and industrial OEMs and their Tier-1 suppliers have ordered surplus chips to increase safety stocks and ensure ongoing production during the pandemic. For example, key EMS players increased their inventory from a historic average of 16% to 23%. These surplus chips could turn into excess inventories when demand slows down.",
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      "text": "The demand boost for smartphones and PCs from remote working is clearly disappearing. And we should be wary of risks that inventory adjustments are not as mild as [some companies] were hoping for just a couple of months ago.",
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      "text": "Given the level of shortage, double ordering [...] we believe the forthcoming inventory correction could be quite sharp, leading to potentially greater earnings cuts [...] than the 2019 and 2016 downcycles.",
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      "text": "Given the level of shortage, double ordering [...] we believe the forthcoming inventory correction could be quite sharp, leading to potentially greater earnings cuts [...] than the 2019 and 2016 downcycles. - Investment Analyst",
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      "text": "Source: Companies' public information, Roland Berger",
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