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Chip Industry Enters a Serious Downturn in 10 Years

Update time : 2022-09-09 14:25:10

"The semiconductor industry is entering its worst downturn in 10 years, and the chip sector could fall another 25%!" Christopher Danley, an analyst at Citi Research, wrote in a report that earnings expectations for the chip industry are generally down this earnings season for the first time since the start of the new crown epidemic.
Citigroup warned that semiconductor stocks are headed for a prolonged downturn as the risk of recession increases. Citigroup's pessimistic forecast comes after major semiconductor industry players Nvidia and Micron Technology warned about the revenue outlook and saw their shares plunge this week.
While many analysts blamed this on a sharp cooling in PC and smartphone sales due to the recession, they pointed to continued strength in the automotive and industrial sectors as reasons for optimism. However, analyst Christopher Danley does not see the same positive factors and believes that these strong sectors have shown signs of future weakness.
Currently, the semiconductor industry continues to face a correction in market conditions under weak end demand and inventory de-stocking, and capital has been withdrawn, with listed semiconductor indices falling below the monthly line to form a short alignment for several days of volume contraction. Nomura Securities therefore lowered the expected annual growth rate of global semiconductor output value this year from 9.9% to 8.3%, and also expects the output value to decrease by 6% annually in 2023, and pointed out that following the weak demand for consumer electronics since the 2nd quarter of this year, the demand for servers and automobiles may also face correction risks in the future under the gradual alleviation of supply chain mismatch.
Morgan Stanley securities according to past experience analysis logic semiconductor boom cycle of the downward period will take about five quarters, but based on the current inventory correction, in addition to RF semiconductor, driver IC, PC semiconductor conductor, the market used to think that the demand is relatively robust cloud semiconductor also appear potential correction risk, semiconductor market conditions are still sluggish, the downward period is expected to be slightly longer than in the past, the study should be In the first half of next year to the bottom, and some semiconductor stocks can be in the fourth quarter of this year at the earliest to lead the bottom.
The World Semiconductor Trade Statistics Bureau, a nonprofit organization that tracks shipments, has just revised its market outlook for this year to 13.9 percent from 16.3 percent previously. By 2023, it expects chip sales to grow by just 4.6%, the lowest growth rate since 2019.

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