South Korean chip production falls for the first time since 2018

Shortly: South Korea’s semiconductor industry has been struggling with overstock for the past six months. This has caused production levels to fall year-on-year for the first time in four years as demand shrinks and inventories remain high. Once again blame is placed on the global economic crisis, particularly on the collapsing electronics market.

As reported by Bloomberg, South Korea’s semiconductor industry recorded a -1.7% year-on-year fall in production in August, marking the first year-on-year decline since January 2018. This comes as inventories reach 67.3% and factory shipments fall (-20.4%). for a second month in a row.

This is not the first sign that a sector is under pressure. The largest US maker of memory chips, Micron, yesterday forecast quarterly sales nearly $2 billion below Wall Street estimates, while Japanese NAND giant Kioxia said it is curbing production and will ramp up production in the coming years months by 30%.

Samsung also warned that the second half of 2022 would be tough. According to IC Insights, the DRAM market halved between May and July, and the pattern will not change.

A recent report by TrendForce predicts that NAND flash prices will fall 15% to 20% in the fourth quarter of the year. 3D NAND fell 30-35% in Q3, and analysts are forecasting another 20-25% drop in Q4. But it’s good news for consumers looking to buy products like solid-state drives that will see further price drops.

While the current global economic state is a big part of the problem, much of what we are seeing now is the post-lockdown effect. At the onset and peak of the pandemic, demand for electronic devices skyrocketed as most of the world worked, studied, and played at home. Businesses couldn’t keep up with consumers, which contributed to low availability and high prices at the time. But the end of lockdowns and the need for cooling left many chipmakers with overstock.

In related news, gaming monitor shipments have declined for the first time ever, and Apple has scaled back production of the iPhone 14.

https://www.techspot.com/news/96156-south-korean-chip-production-falls-first-time-since.html South Korean chip production falls for the first time since 2018

Chris Barrese

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