Chip Industry Deals with the "Cold Winter"
Recently, with the release of the third quarter reports of several chip industry giants, the chip market has obviously felt the chill.
The third quarter financial report showed that Samsung Electronics' operating profit decreased by 30% year on year, and SK Hynix's operating profit decreased by more than 60% year on year. Although the third quarter revenue was better than expected, Texas Instruments was pessimistic about the fourth quarter revenue.
The main reason for the "cold wave" of the chip market is the sluggish demand. In recent months, due to sluggish global economic growth, rising inflation, rising interest rates and other factors, the demand for smart phones, laptops and other consumer electronic products and storage devices dropped sharply, chip prices fell, and chip manufacturers' profits were hit hard.
Faced with the "double downturn" of market demand and chip prices, many chip manufacturers began to cut investment and production capacity. Of course, some chip manufacturers choose to explore other markets besides memory chips. Samsung Electronics recently expressed its willingness to expand its auto chip business in public. With the development of intelligent vehicles, the demand for automotive chips is increasing. According to the data of market research institutions, the value of the automotive semiconductor market last year was 45 billion US dollars, which is expected to reach 74 billion US dollars by 2026.
It is a bold choice to move against the cycle. In the development process of Samsung Electronics, it has used counter cyclical investment to expand the market more than once. When competitors shrink, it goes in the opposite direction. By increasing investment, expanding production capacity, it further depresses prices and makes competitors suffer more losses, thus occupying market share.
In the face of the downturn in the memory chip market, promoting the diversification of chip products is also a way to resist risks. Take Texas Instruments, an American chip giant, for example. Its analog and embedded chip products cover a wide range of consumer, industrial, automotive, aerospace and other fields. When the demand for consumer electronic products was weak, the revenue of its car chips, communication equipment chips and other products kept growing, which was one of the reasons why Texas Instruments' revenue remained stable in the third quarter.
Chip manufacturers need to survive this cold winter whether they follow the trend or go against it. According to the industry forecast, in the medium and long term, with the continuous expansion of emerging industries such as artificial intelligence, big data and the meta universe, the global demand for server memory chips will continue to increase, and the chip industry is still likely to return to the growth cycle. (Source: Economic Daily Author: Yu Yang)
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