Shulou(Shulou.com)11/24 Report--

CTOnews.com, July 30 (Xinhua) during the COVID-19 epidemic, due to a surge in consumer demand for computers, mobile phones and other products at home, semiconductors were in short supply, affecting the production of cars, game consoles and other products. This shortage of semiconductors lasted until the first half of 2022.

However, as the economy slows, the shortage of semiconductors has turned into a surplus. At present, there is an oversupply of NAND and DRAM memory chips, which are mainly used in laptops and data center servers. This is because when there is a shortage of semiconductors, many companies hoard a large number of chips in order to stock up. But when the economy slowed and demand for products such as smartphones and laptops fell sharply, these companies stopped ordering chips and focused on selling existing inventory.

"this has led to a serious' bullwhip effect'in which the previously high demand for semiconductor manufacturers at the back end of the supply chain suddenly disappeared as the end market stopped ordering chips and instead focused on selling existing inventory." Said Peter Hanbury, a partner in Bain's telecom, media and technology division.

However, not all types of semiconductors are in surplus, and demand for chips in the automotive sector remains strong. Some specialty chips are not easy to replace, so "their delivery times and prices are improving, but they are still very high," Hanbury said.

CTOnews.com notes that semiconductor shortages have helped boost chipmakers' profits, including Samsung, the world's largest memory chipmaker. This year, however, Samsung and its competitors SK Hynix and Micron have run into difficulties.

Samsung said on Thursday that second-quarter operating profit fell 95% from a year earlier. Meanwhile, SK Hynix posted a loss in the second quarter, compared with a profit in the same period last year. TSMC, the world's largest chipmaker, also said second-quarter net profit fell 23.3 per cent from a year earlier, the first quarterly decline in four years.

Looking ahead, the PC market looks weak, which could affect Samsung, SK Hynix and Meguiar. For TSMC, the global smartphone market, one of its main sources of revenue, is also under pressure.

In order to increase the price of chips and reduce supply on the market, major memory chip companies have announced plans to reduce production. Samsung said it expects global demand to recover in the second half of the year, and other companies have expressed similar views. However, TSMC said last week that it expected customers to "continue to make inventory adjustments".

The recovery of these companies will depend on a rebound in demand for end products such as consumer electronics, but this in turn has something to do with the macroeconomic recovery, which seems far from certain.

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