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Global semiconductor market is forecast to slow down

Posted August. 11, 2022 08:01,   

Updated August. 11, 2022 08:01


Signs of a downturn in the semiconductor industry have begun to appear as soaring inflation and fears of recession coincide and drag down the sales of personal computers, smartphones, and cars. Gartner, a U.S.-based technological research and consulting firm, predicted that worldwide PC shipments will decline by 9.5 percent from the previous year. Bloomberg analyzed that Micron Technology’s warning on weak demand for chips adds to evidence of global chip demand collapse. A South Korean industry expert said that revenue forecast letdown by Nvidia and Micron indicates that the pace at which chip demand weakens is faster than the market expectation.

Samsung Electronics and SK hynix is not forecast to be so good in the third-quarter of the year According to FnGuide, a financial data collection company, predicted that sales revenue of Samsung Electronics would be down by 14.35 percent year-on-year to 13.5472 trillion won and sales revenue of SK Hynix would be down by 24.1 percent year-on-year to 3.1663 trillion won, respectively.

Micron said on Tuesday that it would cut back infrastructure investment for 2023 because of ‘weakening chip demand,’ but promised to invest 40 billion dollars by 2030 with the momentum from U.S. President Joe Biden’s signing of a semiconductor bill. On Monday, Qualcomm, the world’s biggest wireless tech company, signed a one trillion dollar contract with GlobalFoundries to buy semiconductor chips by 2028. The Chips and Science Act of the U.S. will give tax credits to companies producing semiconductors in the nation and directly support 52 billion dollars in the semiconductor industry.

Micron CEO Sanjay Mehrotra said in an interview with CNBC that the semiconductor law will level the playing field for competitive semiconductor manufacturing in the U.S., which used to be advantageous to the Asian chipmakers.

On the contrary, prospects for semiconductor industry in South Korea appears to be dark, and the passage of the semiconductor bill in the U.S. might incentivize major South Korean companies to focus its mid-to-long term investment only on the U.S. The ruling People Power Party of South Korea tabled a bill to strengthen the competitiveness of semiconductor industry, the gist of which is to expand tax credits for the chipmakers investing in infrastructures on Aug. 4, but it would take time to pass the National Assembly.

Do-Young Kwak now@donga.com