After a pandemic wave, the booming chip industry is bracing itself for more difficult times. US semiconductor manufacturer Micron cuts its investments. And South Korean manufacturers are also reducing their chip production.
Spending should be cut by 30 percent, Micron CEO Sanjay Mehrota said Thursday at the presentation of its quarterly results. There have never been such market conditions as now.
South Korea’s semiconductor production also fell for the first time in more than four years. Production fell 1.7 percent year-on-year in August, data from the National Bureau of Statistics showed Friday. This marks a clear turnaround after semiconductor production rose 17.3 percent in July.
South Koreans expect growth inhibitors
The current drop is widely regarded as a sign that South Korean manufacturers are bracing for a significant slowdown in global demand. According to Yonhap news agency, the reasons for the stagnation in semiconductor exports are China’s lockdown measures and general concerns about a global economic slowdown.
“What surprised us is how strong the decline is,” said Sumit Sadana, Micron’s board member responsible for operations. For the first quarter of the fiscal year, Micron expects revenue of $4.25 billion (EUR 4.4 billion) plus/minus $250 million, while analysts previously thought about $5.62 billion was possible. financial year (until the beginning of September).
The company is concerned that many consumers and businesses are delaying investment in new smartphones or computers due to global inflation. For the year 2022, a percentage decline in computer sales in the high ten can be expected, said Micron executive Sadana. Smartphones are likely to drop by a high single-digit percentage.
The industry is heavily promoted in many places
In Japan, Micron faces a special situation when it comes to curbing investments, where the company receives millions from the government to expand chip production. The Ministry of Commerce and Economy announced that the money would be used to support the production of memory chips at the Hiroshima plant. Micron will receive the equivalent of up to 330 million euros.
Japan was once the world’s leading semiconductor manufacturing center, but has lost ground in the race to Taiwan. The EU and the US also want to bolster the chip industry with multi-billion dollar funding programs.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
