Computer chips face toilet paper hoarding as shortage turns into glut


 Micron's solid-state drives for data center customers were unveiled at a product launch event in San Francisco, U.S., October 24, 2019. High inflation, the recent COVID lockdown in China and the war in Ukraine dampened consumer spending, especially on PCs and smartphones.


Memory chip company Micron Technology announced it would cut production. Micron’s chief commercial officer, Sumit Sadana, acknowledged that the market reversal took Micron by surprise. TechInsights chip economist Dan Hutcheson warned of more bad news after Micron's bleak outlook.


Fears of an industry downturn have taken a toll on chip stocks, with the Philadelphia Semiconductor Index (.SOX) plummeting 35% so far in 2022. (See https://tmsnrt.rs/3arSbBA).. Hoarding can make it worse. Just as nervous shoppers searched supermarket aisles for toilet paper before the COVID-19 lockdown, manufacturers have been stockpiling computer chips.


Experts say the big-chip reversal hits economic sectors unevenly. Big chip suppliers to consumer electronics makers, especially low-end smartphones, will be hardest hit by the recession. Nvidia Corp (NVDA.O), the design giant whose graphics chips are used in gaming and cryptocurrency mining, could see another dip as prices continue to fall.


Chip factory is remodeling production line to make more automotive power management chips. RF chips used in smartphones, "we're seeing a pullback due to phones,\' executive says. Industry executives and analysts can't determine how many excess chips are in global inventories, Jefferies analyst says.


Comments

Post a Comment

Popular posts from this blog

Singapore's crypto ambitions dashed by three arrows

Image
 Crypto players in Southeast Asia’s financial hub are bracing for more bankruptcies and lawsuits. Regulators expected to become less lenient at the Monetary Authority of Singapore (MAS), whose welcoming attitude has helped attract companies from China, India and elsewhere. The collapse of crypto fund Three Arrows Capital, a global digital currency slump, was a high profile victim. Investment in Singapore-based crypto and blockchain companies will grow to $1.48 billion in 2021, a 10-fold increase from the previous year. It will account for almost half of the total investment in the Asia-Pacific region in 2021. MAS regulators say they want to promote crypto-related services. Three Arrows Capital (3AC) began liquidation proceedings in the British Virgin Islands on June 27. 3AC did not respond to a request for comment, and its liquidators told a U.S. bankruptcy court they were unable to locate the fund’s founders, Kyle Davis and Zhu Su. The fallout from 3AC's collapse -- and the market
Read more

UK regulators probe Microsoft's $68.7 billion deal with Activision

Image
 U.K. antitrust regulators said on Wednesday they were opening up a bid by Microsoft to buy Call of Duty maker Activision Blizzard. Britain's Competition and Markets Authority said it had until September 1 to make a first-stage decision on whether a deal between the US tech firm and video game maker Activision would reduce competition in the UK. Lisa Tanzi, Microsoft's corporate vice president and general counsel, said in an interview with Reuters: \\'We are committed to answering the questions raised by regulators and ultimately believe that a thorough scrutiny will help close the deal with broad confidence and have an impact on competition' Activision did not immediately respond to a request for comment. UK regulators are investigating Microsoft’s $68.7 billion deal with Activision. In January, Microsoft announced it would acquire Activision Blizzard, the largest deal in the history of the gaming industry. The CMA's Phase 1 investigation will lead to either approv
Read more