China Chipmaker SMIC Says Phone, PC Demand Has Dropped 'Like a Rock' (nikkei.com) 24
Top Chinese chipmaker Semiconductor Manufacturing International Co. says demand for mobile phones, personal computers and home appliances has dropped "like a rock" and shows no signs of recovering. From a report: Speaking to investors on Friday, CEO Zhao Haijun said the Russia-Ukraine war and China's COVID lockdowns have massively dented demand for consumer electronics and home appliances, which in turn has led to a "serious" adjustment in chip orders for those segments. "Many smartphone, PC and home appliance companies had exposure in Russia and Ukraine, and their revenues [from those markets] are now gone. Sales in their home market [of China] have also fallen due to the COVID situation domestically," Zhao said.
"We cannot yet see an end to the downtrends in these segments," Zhao added. "There are at least 200 million units of smartphones that will disappear suddenly this year and the majority of them are from our domestic Chinese phone makers." Demand for consumer electronics "dropped like a rock, very seriously," the executive said. "Some of our customers are holding more than five months of that type of inventory." However, Zhao said SMIC's factories are still running at 100% capacity, as the company has been allocating resources to products that are still in great shortage, such as power management chips and microcontrollers used in green energy, electric vehicles and industrial applications.
"We cannot yet see an end to the downtrends in these segments," Zhao added. "There are at least 200 million units of smartphones that will disappear suddenly this year and the majority of them are from our domestic Chinese phone makers." Demand for consumer electronics "dropped like a rock, very seriously," the executive said. "Some of our customers are holding more than five months of that type of inventory." However, Zhao said SMIC's factories are still running at 100% capacity, as the company has been allocating resources to products that are still in great shortage, such as power management chips and microcontrollers used in green energy, electric vehicles and industrial applications.
This sounds like a good thing. (Score:5, Informative)
Zhao said SMIC's factories are still running at 100% capacity, as the company has been allocating resources to products that are still in great shortage, such as power management chips and microcontrollers used in green energy, electric vehicles and industrial applications.
So less smart phones sucking up people's time on worthless crap like video games and Facefooking. Instead, we're now building more solar power, electric vehicles, etc. This seems like a good thing to me.
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*less new smart phones sucking up people's time
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*fewer new smart phones sucking up people's time
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Re:This sounds like a good thing. (Score:4, Insightful)
Now wait a minute, I'm 75 in a couple weeks and play multiple types of video games daily. Do they advance the human condition by somehow making things better? It's hard to think of how that works, but "play" is important, so maybe that's it.
As for not buying a new $1K+ smart phone every week or two, the dang things are expensive and my coming on 3 year old Samsung Galaxy Note 10 Plus still pleases me greatly. It does everything I need it to, and want it to. I just can't cook up a good reason to spend more money on a new phone. Even this battery is bulletproof, barely discharging on a 2 hour call, I think it was something like 82% remaining after I talked to my buddy who was driving late into the night and used the call to help stay awake at 12:30 AM.
Expense is important, too. I'm a ham radio operator, a hobby famed for it's expense. But you know what? My best radio, my Kenwood TS-2000, is 20 years old, does an amazing amount of functions, works great, and cost about $2K equivalent in today's money. That's $100 per year of expense so far. Expensive? Smart phones are expensive because they're replaced far more often than my best radio. The thing that makes ham radio expensive is that hams tend to have many multiple radios like that, but it is not required. Ham radio does not HAVE to be expensive, but most hams make it more expensive than it needs to be via "luxury."
The cell phone industry may be a victim of its own success, making amazingly durable and useful products that don't make customers much think about replacing them for a long time.
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Do they advance the human condition by somehow making things better? It's hard to think of how that works, but "play" is important, so maybe that's it.
Most things we do and like to do, don't advance the human condition and it is totally ok. AC doesn't understand this.
The cell phone industry may be a victim of its own success, making amazingly durable and useful products that don't make customers much think about replacing them for a long time.
Same thing happened to desktop PC. We use to change computer almost every year but now the gap between generation for common tasks is meaning less. You can play almost all games with a 8 year old computer (not in ultra graphic mode but they are playable ). Same thing is happening to phones. Fortunately for phone makers, phones tends to fall on the ground or disappear a lot more than desktop p
Mod parent up (Score:3)
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Lead time? (Score:4, Interesting)
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Toilet paper syndrome. AKA, Stockpiling from a shock (Covid-19) creates chaos.
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Or put another way: Free market rules: AKA, Selfishness and unpreparedness guarantees failure when a shock hits.
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It's not me, it's you! (Score:5, Insightful)
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This is an idiotic statement, as they were talking about domestic demand whose factories don't care about such things. Perhaps you should have read the article.
Just for their product (Score:3)
According to Statista, Q1 22 shows over 75 million shipped. That's up vs. the year prior and It's still a healthy market. Maybe it's not their chips that are getting bought? [statista.com]
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TSMC is still selling nearly every wafer they can crank out on processes up to 4 years old (N7). Looks like SMIC is struggling to find customers.
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Texas Instrument's Quarterly is up 14% in gross revenue YoY. [ti.com]
I think you're correct, SMIC may just be suffering from a cause of the Wuflu or that others are finding alternatives away from Chinese suppliers.
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Could be.
We now have an official policy of not using Chinese based supply chains where possible.
We have bought plastic injection tools back to Au. Displays for a new product from Japan.
PCBs are still a problem as China dominates that market.
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GlobalFoundires is selling a lot of wafers too. It's almost industry-wide. I'm floored that SMIC hasn't at least found an automotive contract with Bosch or somebody like that. VWAG has a lot of manufacturing in China, and they're still hurting for ICs.
New Suppliers (Score:3)
I'd suggest a large part of it is companies no longer trusting Chinese silicon and making serious efforts to wean themselves off China in their supply chain.
I thought there was a chip shortage... (Score:1)