Electronics Audience Network Report (Text/Wu Zipeng) The semiconductor industry mentioned the term "cold winter" more frequently in 2022. After the downward cycle of the industry and other adverse effects such as high inflation and logistics obstacles, even the major international semiconductor manufacturers standing at the top of the pyramid cannot survive. Among the top 10 global semiconductors in 2021 statistics by market research agency Gartner, the share price of Samsung fell by 27% this year, which is already a good performance.
Previously, many analytical views believed that the global semiconductor industry will usher in a transfer from consumer electronics to automotive electronics. Now it seems that this trend is undoubtedly correct, but is not equal in terms of the shipment magnitude of product . Even if the demand for chips by smart car has doubled, it is not enough to fill the gap.
In addition, TSMC's latest financial report data further lowered the temperature for this bone-breaking industrial winter, and "self-protection" has become the core proposition for semiconductor manufacturers in the next period of time.
Semiconductor manufacturers' stock prices have been halved
In April this year, market research agency Gartner updated the list of the top 10 global semiconductor manufacturers in 2021, among which the first to tenth are SSK Hynix , Micro Technology , Qualcomm , Qualcomm , Broadcom , Medtech , Medtech , Texas Instruments , Nvidia, AMD.
In the Gartner list, except for Intel, the revenue of major manufacturers has achieved relatively significant growth. Regarding market revenue growth, Andrew Norwood, vice president of research at Gartner, said in the report at the time, "The current chip shortage continues to affect original equipment manufacturers (OEMs) around the world, but the increase in 5G smartphones, as well as strong demand and rising logistics/raw materials prices have jointly driven the increase in the average sales price of semiconductors (ASP), which has led to a significant increase in revenue in 2021." Driven by the eye-catching financial reports, the stock prices of major manufacturers have also risen.
However, after entering 2022, "cold", "cold winter" and "downward" have become popular terms in the industry, and the semiconductor industry has experienced continuous plummeting storage and graphics card values. Investors generally believe that the bull market in the semiconductor industry has reached its peak, so the stock prices of semiconductor companies are like a roller coaster over the top, falling rapidly.
As of the day of writing, according to the real-time stock price, the current share prices of Samsung and SK Hynix have dropped by 27% and 28% respectively compared with the beginning of the year, which is a very large decline, but as we mentioned at the beginning, this decline is already a relatively good-performing manufacturer among the top 10 manufacturers. According to our search, most of the top 10 manufacturers fell by more than 40%, of which Intel fell by even about 50%. AMD, which had previously experienced a plunge, fell by more than 60%. The specific situation is shown in the figure below.
If we expand our field of vision, we will find that most semiconductor equipment manufacturers, wafer manufacturers and domestic semiconductor manufacturers are also experiencing major fluctuations, and even TSMC's current stock price has fallen by nearly 50%.
Analyzing the reasons here will find that there are four main reasons. One is the cyclical adjustment we have pointed out. Since its birth, the semiconductor industry has always had its own industrial cyclicality. Generally, a complete cycle will experience demand explosion, out-of-stock price increase, investment expansion, capacity release, , demand shrinkage, overcapacity, and price decline. These links are linked and progressive. In this semiconductor cycle, consumer electronics still plays a leading role. Although intelligent connected car has become the "X factor" and has increased in the short term, it is obvious that due to the single product, although the use of a bicycle chip is soaring, it cannot offset the negative impact of consumer electronics. Therefore, most semiconductor companies have entered the inventory clearing stage, while memory and graphics cards have begun to enter the stage of price plummeting.
The second is to remove foam. I believe that all the industry can clearly feel that in this semiconductor cycle, the declines of major semiconductor companies have exceeded the past, and the industrial cold index has also surpassed the past.One of the important reasons is that the semiconductor industry has attracted too much attention during this cycle. Whether it is international large companies or new domestic semiconductor listed companies, there are serious stock price bubbles. The current trend is not entirely caused by panic selling. One very important reason is that the industry valuation needs to return to fundamentals and return to a reasonable range.
The third one is a well-known structural factor. In the past year, the United States has issued various relevant sanctions policies against China's semiconductor industry. The semiconductor industry has become the center of the game between great powers, involving the most core talent, technology and equipment issues of the semiconductor industry, and triggering a chain reaction. Semiconductors are the cornerstone of a wide range of applications such as consumption, industry, and automobiles. In the process of gradually realizing domestic production in China, there will inevitably be many links that cannot be filled in the gaps, further increasing the vicious cycle of the semiconductor industry and downstream industries and spreading it to the world.
The last one is external factors such as the recurrence of the epidemic and high inflation, which are also directly or indirectly dragging down the global semiconductor industry.
"Self-protection" has become the top priority for manufacturers
Every time the semiconductor industry is major adjustment, there will be a bottoming out, and the industry will re-enter the climbing growth mode. However, judging from the current market feedback, it is far from the bottom. Let’s take a look at TSMC’s financial report, although the company achieved a net profit of up to 80% in the third quarter, year-on-year growth in , setting a record high. However, the company revised its capital expenditure target for the second time this year, which was previously expected to be between $40 billion and $44 billion, and now a 10% cut would be $36 billion.
In addition, Taiwanese media reported that TSMC's wafer foundry capacity utilization rate is expected to show a downward trend in the next 6 months, including 7nm and most mature processes, with only 28nm and 5nm likely not affected, thanks to some positive impacts brought by the automotive industry and data center fields.
As the global leader in wafer foundry, some changes in TSMC basically represent the current situation of the industry. One aspect of TSMC's reduction in spending is its most advanced 3nm process, the original planned mass production time has been delayed, and long-term customers such as Intel, AMD, Nvidia, MediaTek and Qualcomm have all reduced their investment plans. For example, a source previously pointed out that Qualcomm has reduced its Snapdragon 8 chip orders by 10%-15%, and it is expected that the current Snapdragon 8 will be priced at 30%-40% after the release of the Snapdragon 8 second-generation chip.
In addition to reducing investment, Electronics Audio Network has mentioned the rumors of Intel's layoffs many times in recent reports. Let’s recap the relevant data here, laying off thousands of employees, including marketing and business departments, will lay off about 20% of their employees.
At the same time, according to the latest reports, AMD has also been rumored to reduce orders. According to an internal AMD report, the company is planning to lower its Ryzen 7000 Zen 4 CPU production plan, mainly due to the current global PC market being very sluggish. In addition, manufacturers such as Nvidia and Micron also gave warning signals of business decline.
Some analysts believe that this round of semiconductor winter may be the worst in the past 20 years and will affect every semiconductor company and every semiconductor category. As mentioned in the internal article of Huawei , "The entire company's business policy should shift from pursuing scale to pursuing profits and cash flow" in Ren Zhengfei's speech, "Take survival as the main program, marginal businesses shrink and close all over the board, and pass the cold to everyone." Today's semiconductor industry is also passing cold to every link and participants. For large manufacturers, "self-protection" is the main theme, and for small and medium-sized manufacturers, "survival" is the most critical.
written at the end
Samsung has proved many times in the storage industry that although the industry trough is a challenge and an opportunity, no matter what means it is, if you can survive and survive, when your opponent cannot support it, it is time to become king again. Of course, as we mentioned above, the semiconductor recession, which used the storage industry as the signal, could only be considered a warm winter compared to this time.However, even the coldest winter will end, and spring will always come. If you survive, there are endless possibilities.
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