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The global chip market is increasingly divided
Delivery time:
2022-11-03 13:48
This article is adapted from the economic information daily
Recently, with the U. S. and other stock market volatility, Chip Stocks also showed significant volatility and correction, and the downward trend is more than the overall trend of the market. The reason behind this is that the market environment that will dominate 2022 and the 2021 chip market is changing. Many chip enterprises to the future demand expectations have begun to weaken significantly, and in different application areas have emerged more obvious differentiation.
Chip Giants such as AMD, Micron, Intel, Samsung and Nvidia have issued worse-than-expected earnings forecasts or reports, dealing a significant blow to sentiment.
On October 28th Intel reported a 20% year-on-year drop in revenue and an 85% drop in net income to $1.019 billion for the third quarter of 2022. Both of the company's core businesses fell.
Memory-chip giant micron also reported disappointing fourth-quarter results for its fiscal 2022 fiscal year in early October. Operating income fell about 20 per cent year-on-year in the quarter, while net income plunged 45 per cent year-on-year.
In fact, prior to this, such as AMD, Nvidia, and other chip giants are coincidentally lowered earnings expectations. In spite of their different business priorities, the Giants have on several occasions expressed concern about a broader cooling in the chip market.
Market researchers have also issued warnings. Semiconductor Intelligence has forecast a 6 per cent contraction in the 2023 global chip market, while Malcolm Penn has forecast a 22 per cent decline in the coming year.
Market participants expect the sector to soften, partly because of the gloomy global economic outlook. It is estimated that every 3 percent slowdown in global GDP growth will result in a 16 percent decline in semiconductor market growth. Second, the personal computer (PC-RRB- market demand has shown significant weakness.
However, the chip cold wave is not enveloping the entire industry, the chip demand for cars has not yet weakened, still forms certain support to the industry boom. The chip shortage that began in 2020 has not gone away, though it has improved in the global auto industry. Autoforecast Solutions (AFS) released the latest data for the global auto industry today, showing that as of Sept. 25, chip shortages are affecting the industry, the global auto market has cut production by about 3,376,800 vehicles this year.
Across the global market, the chip shortage is continuing and affecting the global production of some car companies. The industry is widely expected, “Missing core” to the auto industry will bring at least the impact of at least until the middle or end of next year.
Moreover, in contrast to the cautious expectations and retrenchment of investment in the future, investment in more advanced chip production has not actually stopped.
On October 28th Fumio Kishida, the prime minister, said he would invest Y3,000 bn in Semiconductor industry. According to the Nikkei, Canon will invest y50bn to build a new semiconductor equipment plant in eastern Japan, which will start construction at the 2023 and operate in the spring of 2025, to double the capacity of its current lithography machines. Samsung Electronics said it planned to more than quadruple its advanced chip capacity in the 2027 sector despite its current global depression, Reuters reported. There are signs that the chip industry will be more competitive in this area in the future.
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