The global shortage of semiconductors is now becoming a glut

The global shortage of semiconductors seems to have officially “squeezed out” the other way and, as such, become a glut. Yes, you read that rightthere is now a glut of semiconductors from major manufacturers, according to a new report from Caixin.

Names like Taiwan Semiconductor Manufacturing Co (TSMC), Advanced Micro Devices Inc (AMD) and Nvidia are now facing “unsold stocks” of inventory due to falling demand and canceled orders, the report said.

This means that the years waiting for tokens seems to have officially come to an end.

Xie Ruifeng from the semiconductor industry market research institute ICwise said Caixin: “This cycle of business sentiment is reversing so quickly that chip designers were struggling to find production capacity just last year, but now they find the chips won’t sell.”

Meanwhile, demand for smartphones and PCs is declining, with global shipments of 5G smartphones expected to fall by 150 million units in 2022, the report said. Demand for 5G chips will also plunge by 100 million units, to 120 million units, the report said.

Caixin noted that TSMC faces significantly reduced orders:

TSMC, the world’s largest contract chipmaker, is facing reduced orders from four of its biggest customers, reflecting slowing global demand. JPMorgan Chase said in a report in early September that AMD, Nvidia, Qualcomm and MediaTek had cut chip orders with TSMC.

And names like AMD and Intel are also suffering from slowing demand:

Other semiconductor companies are also facing tough conditions. AMD lowered its revenue forecast for the third quarter, citing a significant weakening in the PC market. Intel, Nvidia and Micron Technology all posted moderate outlooks.

In the first half of 2022, macroeconomic headwinds and a number of “black swan” factors combined to depress demand for consumer electronics, with smartphones and PCs bearing the brunt. Micron predicted that global PC shipments will decline by 10% to 20% in 2022, while the global smartphone market will decline by less than 10%.

And manufacturers are dealing with “six months of inventory” they built up following the 2021 shortage… and once optimistic demand forecasts. This was, of course, at a time when free money was being handed out to “combat” the pandemic. Now, with tighter monetary policy globally, it should come as no surprise that demand is falling.

Mr. Sravan Kundojjala, Associate Director of Smartphone Component Technology Services at Strategy Analytics, confirmed that current supplies held in stock by companies could last until mid-2023 at current demand levels.

Still, it looks like all the massive new infrastructure projects undertaken by companies like Intel and TSMC in the aftermath of last year’s shortage will go ahead. Semiconductor Manufacturing International Corp (SMIC) Co-General Manager Zhao Haijun told Caixin: “We won’t change o

By Zerohedge.com

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