Semiconductors no longer overheating

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On the heels of worldwide shortages due to the pandemic and red-hot demand, the semiconductor industry is now dealing with a sudden cooling off, resulting in a surplus of memory chips, processors and some other semiconductors. This cold snap, which took the entire industry by surprise, is due to consumer skittishness in the face of unanticipated inflation, freezing PC and smartphone sales. What’s more, device manufacturers have stockpiled parts to pad against market vagaries and potential future shortages, making their immediate need for semiconductors less urgent, especially with the economic downturn.

What this means, for example, is that Intel surprised investors by announcing that its last quarter’s profits plummeted by 2.6 billion dollars, or 15% compared to expectations. Other companies such as Nvidia, Micron and TSMC also released disappointing financial reports, and some might freeze manufacturing-capacity expansion projects. No one can predict how long this new ice age will last.

⇨ Ars Technica/FT, Richard Waters, “US chipmakers hit by sudden downturn after pandemic boom.”

2022-08-17