According to stock research reports from IHS iSuppli, the decline in demand for semiconductors in the fourth quarter of 2011, exacerbated excess inventory situation of the semiconductor industry,  and brought about a series of unpleasant change, but after new signs of optimism semiconductor manufacturers are eager to forget the unhappy, hope this is the end of the downturn phase. Preliminary data show that last year's fourth quarter DOI of semiconductor increased by 6% than the third quarter, while operating income ring fell 6 percent. In contrast, the inventory situation in the third quarter is healthy, DOI was down 6.5 percent, while operating income rose 6.5 percent.Overall, in the second half of 2011, operating income and profits have been disappointing, many manufacturers have difficulty falling orders to adjust production capacity utilization. Capacity utilization in the fourth quarter dropped by another reproduction of the third quarter, that the factory started to achieve the best level.Inventory expansion of semiconductor makes suppliers and their end customers worried. IHS believes that the above factors, as well as due to the bleak global economic situation at the end, resulted in the overall semiconductor demand fell the fourth quarter of last year. But the good news is that manufacturers forecast demand in the first quarter of 2012 rebounded.After ending the fourth quarter earnings season, the mentality is to forget the past, vision for the future. A common theme of many investors on a conference call is semiconductor managers believe the current downturn cycle has bottomed out.If the demand is stronger than expected, those manufacturers with too much inventory can even turn it into their own advantages in the early stages of adjustment in a more favorable position than those low inventory vendors.