Semiconductor market mutates after unprecedented growth Nikkei Chinese website

The semiconductor market, which has been hot for two years due to a shortage of supply, is beginning to change. Inventories of representative semiconductor DRAMs have increased since spring this year, and prices have plummeted by more than 30%. Businesses are less willing to invest in equipment and consumers are less willing to purchase due to concerns about a slowdown in the Chinese mainland economy and global inflation. In Taiwan, the center of global semiconductor production, vigilance is spreading rapidly.

“(In the world semiconductor market) although it was optimistic before the first half of this year, the situation has now reversed.” Chairman Lu Donghui, who serves as the representative of the Taiwanese legal representative of Micron, the world’s third largest DRAM company, accepted the Nikkei on July 6. (Chinese version: Nikkei Chinese website) The answer in the interview is full of a sense of crisis for the sudden change of the market. Micron will build the largest DRAM production base in Taiwan.

Lu Donghui also pointed out that the market has been slowing down in recent months. He also stressed that the changes taking place now are by no means temporary.

On July 11, at the financial report conference held by Taiwan Nanya Technology, the fourth largest DRAM company in the world, the focus was still on the changes in the semiconductor market.

Li Peiying, head of operations and general manager, said demand was waning. (2022) DRAM prices for semiconductors may fall further from July to September. It can be seen that there is a strong sense of crisis for the future market prospects. Regarding the reasons for the worsening demand, Li Peiying believes that the combination of three factors including the impact of mainland China’s closure of Shanghai on Shanghai, inflation and Russia’s attack on Ukraine, consumers’ willingness to buy has been lower than expected.

In fact, in mainland China, the world’s largest semiconductor consumer market, sales have declined significantly. From January to May this year, the supply of smartphones dropped by 27% year-on-year. New vehicle sales also fell 12% year over year. In addition, turning to the world, the supply of personal computers is expected to decrease by 8 to 10% this year, and the environment in which semiconductors are located has now changed greatly.

From the perspective of the entire industry, not only the situation of storage semiconductor DRAM is severe. The impact has also spread to old-fashioned general-purpose semiconductors used in home appliances and computers.

Although it is also a typical manifestation of semiconductor shortage, an executive of a major Taiwanese semiconductor manufacturer said: “The recent semiconductor shortage seems to be an illusion. We started to adjust the inventory in April, and it is still continuing. The reasonable inventory is 2 months, and now it has been more than 3 months”.

Another executive in the same industry also said that “the production of companies purchasing semiconductors has completely declined. More and more companies are canceling semiconductor orders that have been placed, and the direction has undoubtedly changed.”

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