March 28, 2024

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The semiconductor industry is preparing for collapse

The semiconductor industry is preparing for collapse

Who would have thought just a few months ago. The numbers leave no room for doubt: the current situation has flared up integrated circuit manufacturers With the change of the foot. We came from two and a half years ago The demand for chips has increased dramatically As a result, among other factors, of the growth of the PC market driven by remote work and increased appetite Auto industry.

The major semiconductor manufacturers have been doing well. In fact, as we told you months ago, continuous demand of integrated circuits was so high that it could not give an answer for more than two years. This scenario has caused many of them to choose Facing big investments To set up in the shortest possible time new plants Chip manufacturing.

Intel, TSMC, Samsung or SMIC are the largest semiconductor manufacturers They are already building The new facilities, and while they are still necessary, it is possible that, against all odds, they will not be as necessary in the short and medium term as analysts’ expectations in this market have so far been. This unexpected deviation can only have one driver: the demand for chips Collapses in some sectors.

The numbers don’t lie: demand is already (unexpectedly) declining

It’s been nearly four decades since microprocessor shipments last saw such a sharp decline for two years in a row. According to Dean McCarronAnalyst at consulting firm Mercury Research, since 1984 Microprocessor Distribution Didn’t fall too much As it happened during the second quarter of 2022.

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Let’s not deceive ourselves. Processor manufacturers continue to do well because this market from a global point of view maintains some positive inertia, but This change of direction worry them. In fact, Intel and NVIDIA have recognized You’ve already identified a drop in demand for the chips you’re providing to PC and server integrators.

Intel and NVIDIA have acknowledged that they have already identified a clear reduction in demand for the chips they deliver to PC and server integrators.

Micron Technology, which is one of the largest manufacturers of memory drives and SSD drives, also confirmed It receives fewer requests from data centers, which is said to be one of its biggest sources of revenue. The Chinese integrated circuit manufacturer SMIC forecast Its sales of some chips are falling sharply as a result of the major downturn it is experiencing smart phone market.

TSMCFAB

Some media don’t get the word out when it comes to describing the mood in the semiconductor industry. Some claim that panic started To expand into this sector, others choose to dilute by ensuring that chip makers They are on alert And they decided to cut their sales forecast sharply for the coming months.

Economic uncertainty and cyclical downturn seem to be behind the change in chip market direction

In any case, there are two reasons that likely explain the origin of the reeling this industry has already started economic uncertainty From Precise geostrategic situation On the other hand, the cyclical contraction of the market which usually follows a period of very noticeable growth. Under these circumstances, it is not easy to predict what will happen in the coming months, but we can be sure that they will not be peaceful in this context.

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Pictures: TSMC | Intel Corporation

Across: Reuters | Bloomberg