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No one can predict the direction of chips in the market. A year ago, chips were a hot commodity, but a year later, not many people wanted chips.
This situation is especially obvious in the field of consumer electronics. I remember that in the first half of 2021, most domestic mobile phone manufacturers were unable to get the goods. Even Apple company reported that it would adjust its production capacity targets because of the shortage of chips. .
But now, chips have turned to excess inventory. Some US companies have adjusted orders to chip manufacturers, reduced production capacity, and set sales targets on clearing inventory. Are US companies hoarding their original chips in vain? Can the inventory be cleared smoothly?
American chips have been hoarded in vain
Most of the world's chip production capacity is concentrated in Asian factories. TSMC and Samsung have successively increased their production capacity targets. It provides a large amount of chip manufacturing for the chip market with strong demand in the past two years, and these chip orders mainly come from US companies.
Take TSMC as an example, to what extent does its chip production capacity reach its peak? Those who are paying attention will know that TSMC has successively increased its foundry quotations and canceled customer OEM discounts. And they increase the price to get goods from equipment suppliers, just to get the equipment into production as soon as possible.
As customers order 5nm chips in large quantities, Apple, AMD, Nvidia, Intel, etc. have successively snapped up TSMC's 5nm production capacity, forcing TSMC to temporarily divert the 3nm production line for 5nm chip production.
These situations have put a lot of pressure on TSMC in chip production. Fortunately, TSMC has a huge production capacity system and can try its best to meet customer needs. But in fact, US companies look to TSMC to manufacture chips not just to meet their needs, but also to stockpile chips.
promotes chip prices by hoarding goods, and then sells the chips when the time is right to obtain greater profits. At that time, the prices of equipment and materials related to the chip industry chain all increased. The reason was that some dealer companies hoarded chips and waited for the price to rise to earn the difference.
However, no one expected that American companies would stock up on chips for nothing. According to news from foreign media, from the end of May to June, the supply of chips turned from being in short supply to overstocking in some areas.
What excess inventory means is obvious. If the large number of chips previously accumulated are not shipped in time, they may depreciate in value and be lost in their hands. Therefore, many U.S. companies are anxious to ship products and adjust prices to sell chips. As for the effect of
, it’s hard to say. After all, there are still a large number of chips on the market that have not been consumed, and it is impossible to purchase additional chips. Especially in the field of smartphones and computers, it may not be as easy as before to continue selling chips.
In response, US memory chip manufacturer Micron Technology has cut production to avoid an increase in inventory that is difficult to handle.
Of course, excess inventory does not point to all semiconductor fields. Compared with automotive semiconductors, consumer electronics chips will be difficult to sell. The automobile industry is developing vigorously, and a large number of giants have entered the smart car track. A large number of automotive grade SOC, TPMS, sensor chips, etc. are required.
The demand for automotive chips in the future may be no less than that of smartphones. Because smartphones are becoming more and more durable, there is generally no need to replace them, and it is impossible to continue to provide chip suppliers with a larger market space.
Can American companies clear their inventory smoothly?
It is estimated that many people have predicted that the chip supply and demand relationship will turn to excess inventory, but this still caught some US companies off guard. A sudden drop in market demand will increase the pressure to clear inventory. If the inventory continues to accumulate, even if it is sold at a reduced price, it may not be able to be sold.
chips are different from general sustainable products. The chips have a certain timeliness. The chips that are selling like hotcakes this year will no longer be wanted in a few years. When scrap is sold, it is impossible to remanufacture it, so can U.S. companies clear their inventory smoothly? This depends on the actual situation.
There is currently no sign that the high-end mobile phone chip of US companies can be cleared immediately. Consumer demand for replacement phones has declined, resulting in mobile phone manufacturers still having a large number of mobile phones waiting to be shipped. As for the overstock of chip suppliers, unless there is an immediate wave of machine replacement boom in the market, giving suppliers the opportunity to ship in batches, they can only wait.
At the same time, reduce or abandon new chip production, and slowly consume the chip inventory before making more considerations.
Some people may be curious, will the excess chip inventory of US companies affect the market? Theoretically it's impossible. After all, they are the ones accumulating chips, and consumers in the market will not have to worry about clearing inventory, so there is no need to worry.
After there is excess inventory, in order to sell more chips, US companies may adopt a price reduction strategy to give mobile phone manufacturers lower prices. If the price of mobile phone products can be reduced from the chip aspect, it may make people who are usually reluctant to spend money consider buying it.
Summary
Generally speaking, chips are turning to excess inventory, and how to clean up excess chips is an issue that the other party needs to consider. Chips produced in large quantities in the past may become obsolete commodities in the future, and their market value will be greatly reduced.
In the past, we didn’t sell chips to us and kept them hidden. But now it’s better and we can keep the chips for our own use.
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