Dell: PC supply chains back on track

According to Tom Sweet, the CFO of Dell Technologies Inc., the supply chain in the PC market has basically returned to normal. The cost of many components is falling as the deficit is no longer there and demand has weakened. However, Dell is now working to eliminate its inventory before taking advantage of more competitive component prices.

The chip industry often struggles to meet demand, partly because it takes months to produce components. In addition, semiconductor manufacturers also serve a much wider sector of the economy: chips are used in automobiles, factory equipment and appliances.

In the past, investors viewed increased lead times as a sign that the industry was accumulating too much inventory, which was a precursor to a downturn. But the supply chain disruptions caused by the pandemic have led to an unprecedented deficit. According to a study by the Susquehanna Financial Group, the production time, that is, the difference between ordering a chip and delivering it, averaged 26.8 weeks in August. It's a day shorter than the previous month. According to the company's analysts, the norm would be to return to 10-14-week terms of chip production.