Per editor: Lu Xiangyong, Gai Yuanyuan
Recently, with the release of financial reports by global chip giants including Intel, Samsung, AMD, Qualcomm, Texas Instruments, the industry found that the news of the global chip giant's "thunderstorm" hit like dominoes.
As for the reasons for the thunderstorm in performance, "weak demand", "destocking" and "price decline" are the words commonly used by chip giants to explain performance changes. Whether it is the smartphone side, PC side or memory market, it is currently seriously affected by the weak demand in the downstream consumer market.
Image source: Daily Economic News Infographic
Chip industry cold current
On February 2, US time, Qualcomm released its financial report for the first quarter of fiscal 2023 (as of the end of December last year), achieving revenue of $9.456 billion, a year-on-year decrease of 12%; Non-GAAP net income was $2,684 million, down 27% year-over-year.
Qualcomm said demand for mobile phones remained weak and the situation in the corporate and industrial sectors was deteriorating. But the company said demand for automotive chips remained strong. Qualcomm expects revenue in the second quarter of fiscal 2023 (ending at the end of March this year) to be about $8.7 billion to $9.5 billion, flat or 8% lower than the previous quarter and down 11% to 19% year-over-year. The outlook is below market expectations of $9.581 billion. Qualcomm believes that sluggish mobile phone demand and inventory adjustment are the main reasons for dragging down operating performance, and expects that the inventory adjustment period may continue into the first half of this year.
According to the financial report of TI (Texas Instruments), a leading analog chip company, the company's revenue during Q4 was 4.67 billion US dollars, down 3.35% year-on-year and 10.89% month-on-month; Net profit was US$1.962 billion, down 8% year-on-year and 14.51% month-on-month.
The first thunder to detonate the chip industry was the giant Intel.
Beijing time on January 26 after the US stock market, Intel announced the fourth quarter and full year results of 2022, the chip giant's fourth quarter results failed to meet market expectations, fell sharply by 32%, hitting the lowest quarterly revenue since 2016.
In the memory chip market, the situation is even more serious. Samsung's financial report released on January 31 showed that in the fourth quarter of 2022, Samsung's operating profit fell by 69% year-on-year, from 13.86 trillion won to 4.3 trillion won, the lowest point in eight years, and the full-year operating profit was 43.38 trillion won, down 16% year-on-year. Samsung said that the decline in performance was mainly affected by the sharp decline in memory chip prices, coupled with weak smartphone sales.
Hynix, the world's second-largest memory chip maker, posted an operating loss of 1.7 trillion won ($1.4 billion) in the fourth quarter of 2022, compared with a profit of 4.2 trillion won in the same period last year, the company's first quarterly loss since the third quarter of 2012. At the same time, Micron, Samsung, Hynix and other companies have announced plans to reduce production and expenses.
Memory chips can be roughly divided into two directions: DRAM chip (memory) and NAND Flash (flash memory). According to the first financial report, the price of NAND fell by at least 30% last year, and the price reduction of DRAM was even more violent.
Mobile phone shipments fell to a decade low last year
Giants such as Qualcomm and Samsung have mentioned weak smartphone sales in the reasons for the decline in performance.
IDC's latest report shows that global smartphone shipments hit a 10-year low last year, with the fourth quarter particularly bad, mainly due to macroeconomic malaise and weak consumer demand. According to IDC, global smartphone shipments in 2022 were 1.21 billion units, down 11.3% from the previous year, the lowest since 2013. IDC said the decline in shipments was due to a sharp drop in consumer demand, inflationary inflation and economic uncertainty.
In China, IDC reported that in the fourth quarter of 2022, China's smartphone market shipped about 72.92 million units, down 12.6% year-on-year. Throughout 2022, China's smartphone market shipped about 286 million units, down 13.2% year-on-year, the largest decline on record.
It is worth noting that China's smartphone market shipments in 2022 have also fallen below 300 million units after 10 years, after only 2012 domestic smartphone shipments were less than 220 million units.
When it comes to why shipments have fallen into the "freezing point", the outside world may first blame the epidemic. However, Guo Tianxiang, senior analyst at IDC China, pointed out that the impact of the epidemic is only "worse", after all, before the outbreak of the epidemic in 2020, China's smartphone market has begun to decline continuously. Therefore, the main reasons for the continuous decline of China's smartphone market are still concentrated in the following aspects: market saturation and longer replacement cycles; Technological development has encountered bottlenecks and insufficient innovation of new products; 5G push is lower than expected and lacks new killer applications; Product quality is getting better and better, excess performance and other factors.
IDC predicts that in 2023, despite the adjustment of epidemic prevention and control policies, the outlook of China's smartphone market is still difficult to say optimistic, and it is difficult to immediately rebound significantly. Only with the economic environment and the gradual improvement and increase of income, consumer confidence is restored, and market demand is expected to truly rebound in the second half of this year.
Editor| Lu Xiangyong Gai Yuanyuan
Proofreading | Duan Lian
Daily economic news is synthesized from 21st Century Business Herald, Interface News, First Finance and Economics, Every App (Reporter Wang Jing)