After the rise of PC and electronics during the corona pandemic, inflation tightened consumers’ belts, abruptly ending the golden age of the chip industry. The world’s largest manufacturer of memory chips and smartphones, Samsung, reported an unexpectedly sharp decline in operating profit in the past quarter on Friday. At the same time, the American chip manufacturer AMD warned of a significantly weaker sales development.
“Memory chip trading is worse than expected, DRAM chip shipments may have fallen by a double-digit percentage compared to the second quarter,” Cape Investment & Securities analyst Park Sung said soon of Samsung. In addition, the trend in current price negotiations indicates that customer demand deteriorated significantly during the quarter. “Investors will be interested to hear if Samsung is considering cutting back on capital expenditures, planning to do major maintenance on its chip equipment, or focusing on profitability,” Park said. “From this you can draw conclusions about the chip offer.”
Experts don’t expect recovery until early 2023
Analysts expect memory chip prices to fall further in the current quarter, likely depressing fourth-quarter earnings. A recovery in demand is not expected until early 2023. Rival Micron Technology was the first memory chip maker to officially cancel its investment plans for the following year last week. The larger competitor SK Hynix also indicated a possible investment discount.
According to preliminary figures, Samsung’s operating income fell 32 percent to $7.67 billion from July to September. It would be the first quarterly decline in three years. Samsung plans to release detailed quarterly results on October 27.
AMD feels the silence in the PC market
Meanwhile, US chip maker AMD announced it expected revenues of only around $5.6 billion in the third quarter, up from around $6.7 billion in August. “The PC market turned out to be significantly weaker in the quarter,” explains AMD chief Lisa Su. “I think AMD is showing that no one is safe from the post-pandemic PC crisis,” said Anshel Sag, chip analyst at Moor Insights & Strategy.
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.
