Dec 28, 2022 15:00:00

While semiconductor shortages are being resolved, PCs and smartphones are not selling well, and chip inventories are exploding. What are the voices of each manufacturer?

Since 2020, there has been a global shortage of semiconductors due to the pandemic of the new coronavirus infection (

COVID -19) and increased demand for cryptocurrency mining. I made a statement , and the lead time from ordering semiconductors to actual delivery exceeded 20 weeks . However, on the other hand, in recent years, the shortage of semiconductors has eased, and at the same time, consumers have refrained from buying PCs and smartphones, and it has been reported that semiconductor chip inventories have increased and there has been an oversupply. It is

Chip Inventories Swell as Consumers Buy Fewer Gadgets - WSJ
https://www.wsj.com/articles/chip-inventories-swell-as-consumers-buy-fewer-gadgets-11672092605

In the two years from around 2020, semiconductors will shift from a period of hyper-demand to the extent that global supply shortages will occur, to consumer electronic devices against the backdrop of rising interest rates, falling stock markets, and concerns about an economic recession. However, there is a decline in purchasing power, and a recovery is seen again in the form of a sharp oversupply. As a result, chip inventories have ballooned in the second half of 2022, confirming that various products were facing overstock. As a result, chip manufacturers' profitability has declined significantly, and in order to recover from this, there has been a series of reductions in personnel and capital investment.

Semiconductor manufacturer Micron Technology said it will cut about 10% of its workforce in December 2022, with weaker earnings forecasts than Wall Street expected. As a result, CEO Sanjay Mehrotra said, 'Chip inventory levels are well above target levels.'

Lead times between ordering and delivering chips, which swelled early in the pandemic, have shortened in the second half of 2022, according to an analysis conducted by trade and technology firm Susquehanna International Group (SIG) . And an analysis by global financial institution UBS found that levels of chip inventories, commonly measured in “days,” are at their highest level in more than a decade, with the central bank of the chip industry and its supply chain. It turns out that it is 'about 40 days' higher than the value.

”Inventory levels, typically measured in days, are at their highest levels in more than a decade, or about 40 days above the median for the chip industry and its supply chain, according to a UBS analysis.” https://t.co /35Dzzmozdk

— Hurricane Capital (@HurriCap) December 27, 2022

Enrique Lores, CEO of PC maker HP, said, ``Consumer PC inventories are likely to remain high for the next two quarters, but there are signs that current inventories are being cleared. 'We are showing a change in demand,' he said at an investor event in December 2022. ”, he said of the current state of the market. Another major PC maker, Dell, has a similar view on inventory and market conditions, saying it doesn't offer discounts on its own.

In addition, when Intel's CEO Pat Gelsinger announced earnings forecasts and job cuts in October 2022, he said, ``It's hard to find a good news point right now.'' I said Another chip manufacturer, Advanced Micro Devices (AMD), has also warned about rising inventory levels. We are dealing with the situation and I think the market will continue to be volatile.'

NVIDIA, the largest sales leader in graphics chips, is no exception to the problem of excess inventory, which could dampen profits on its new generation of ultra-fast video game graphics chips. says. NVIDIA Chief Financial Officer Colette Kress expects inventory levels to approach normal levels by the end of January 2023.

Not only PC shipments are showing a sharp decline, but smartphone sales are also sluggish. Micron Technology has immediately downgraded its guidance for smartphone shipments in 2022 from the guidance it issued three months ago. In addition, Qualcomm, which supplies chips to be installed in Samsung and Apple, has repeatedly lowered its sales forecast for 2022, and in November, ``the slump in the smartphone market will continue and the inventory of chips will increase.'' I was. Qualcomm's Chief Financial Officer Akashi Palkiwala said, 'It will take two to three quarters to resolve this issue.'

While we are currently in an oversupply situation, the management of chip makers expects that `` chip sales will roughly double by 2030, exceeding $ 1 trillion (about 130 trillion yen) worldwide ''. We believe we need to build more plants to meet long-term demand growth.

”Despite the near-term glut, chip executives are preparing for a long-term rise in demand for chips that will require them to build more factories. Industry executives expect chip sales to roughly double by 2030, surpassing $1 trillion globally.”

— Hurricane Capital (@HurriCap) December 27, 2022

In Japan as well, plans are being made to establish a new factory in anticipation of increased demand for semiconductor-related parts. Announced on December 19th. In addition, TSMC, a major semiconductor foundry in Taiwan, will establish a joint venture with Sony Semiconductor Solutions, a subsidiary of the Sony Group, to build a new large-scale factory in Kumamoto Prefecture with the aim of starting semiconductor manufacturing by 2024. I'm here.

In addition to lamenting overstock, Jim Anderson, CEO of Lattice Semiconductor, which manufactures chips for the defense industry and data centers, has shown a positive attitude even with inventories increasing by nearly 30%. “Our products can last 15 to 20 years, so the risk of our products becoming obsolete is very low, and it makes more sense to keep more inventory than to run out of stock,” Anderson said. ' said.