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Businesses Technology

Chipmakers Are Flashing More Warnings on the Global Economy (bloomberg.com) 59

Mounting concern over semiconductor demand is sending shudders through North Asia's high-tech exporters, which historically serve as a bellwether for the international economy. From a report: South Korean behemoths Samsung Electronics and SK Hynix have signaled plans to dial back investment outlays, while across the East China Sea, the world's biggest contract chipmaker Taiwan Semiconductor Manufacturing Co. indicated a similar expectation. Fading tech demand highlights a darkening picture as Russia's war on Ukraine and rising interest rates damp activity. The following charts look at the chip industry and its implications for the world economy.

In recent weeks, major chip manufacturers Micron, Nvidia, Intel and Advanced Micro Devices have warned of weaker export orders. Gartner predicts an abrupt end to one of the industry's biggest boom cycles. The research firm slashed its outlook for revenue growth to just 7.4% in 2022, down from 14% seen three months earlier. Gartner then sees it falling 2.5% in 2023. Memory chips are among the most vulnerable segments in the $500 billion semiconductor market to global economic performance, and Samsung and SK Hyinx' sales of dynamic random access memory, or DRAM, a chip that holds bits of data, are central to Korean trade.

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Chipmakers Are Flashing More Warnings on the Global Economy

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  • by Anonymous Coward
    We're not in a recession. President Biden and his people told me so.
    • Sure, wars in Europe, massive inflation and recession but we no longer have mean tweets! We are winning the culture war, comrade! Fill out your pronouns on your twitter bio while you are standing in the unemployment line.
      • Re: (Score:1, Funny)

        by Anonymous Coward
        Also, Michelle Obama is actually a woman! Forget about his giant penis. It's a WOMAN because it dresses like one.
        • by aergern ( 127031 )

          Yeah, never mind that **she** had two children WELL before your silly hate took over and before you knew who **she** was. Boy, you just look like a complete fucking moron. So many things to be a triggered little snowflake over and you choose **her**. What a failure of a human you are.

          • by Anonymous Coward

            Yeah, never mind that **she** had two children WELL before your silly hate took over and before you knew who **she** was.

            Uh-huh, sure he did. Show me the picture of when he was pregnant? No such pictures exist.

            • by Anonymous Coward
              They also made a point in its biography that it used a fertility clinic to conceive. Suuuurrre. Uh huh.
            • Exceptional claims require exceptional proof. Show me the pictures of **his** d!ck. I'm sure you fap to them all the time.
          • According to leftists and Democrats, men can give birth to children too so I do not see why you are so angry. Who are you to define someone elses gender? Time to get educated. He may be correct.
          • by taustin ( 171655 )

            Is that hook in your mouth tasty?

  • by OrangeTide ( 124937 ) on Wednesday August 17, 2022 @11:50AM (#62797331) Homepage Journal

    Don't worry, lots of chips will be made when mobilizing for a new world war. More rockets, more fighter jets, more ships.

    How will it start? US vs Russia over Ukraine? China vs India over Sri Lanka or shared borders? Blockade and Defense of Taiwan? Lots of choices to choose from.

    • no nuclear powers are going to go to war so long as the adults are in charge. America might put theocratic lunatics in office in the next few cycles, and if they do that yeah, you might see WWIII. Those guys are itching for an excuse to "rapture". But so long as the Mike Pences of the world are kept at bay we're safe enough.

      The 1% would really like a recession though to depress wages. They're very upset people across the globe are making more money. That money is theirs. All money is theirs. And the pow
      • by taustin ( 171655 )

        so long as the adults are in charge.

        Everybody wants to be a comedian.

        That time passed decades ago.

      • no nuclear powers are going to go to war so long as the adults are in charge

        Does Putin act like an 'adult' in your view?

      • no nuclear powers are going to go to war so long as the adults are in charge.

        So you're saying after the mid-terms it's game over?

  • by DontBeAMoran ( 4843879 ) on Wednesday August 17, 2022 @12:11PM (#62797447)

    Stop looking at growth! Infinite growth is impossible you fucking idiots!

    They should be looking at net profits, year-to-year. If it increase or stays the same, then fine it's just business as usual. The only time to panic is when net profits decrease, and the panic has to match the decrease itself.

    • by Junta ( 36770 )

      Well, infinite growth is quite possible in conjunction with inflation in terms of revenue/profit as measured in currency. In that case, ultimately money is a number, and numbers can keep growing..

      So the psychology of expecting infinite growth is among the contributors to a target of at least a little inflation.

      • As long as the world isnâ(TM)t as rich as the average American, you can theoretically grow. Europe is a bit more than halfway there, China is hot on its heels but there are entire continents and regions that have quite a bit to grow.

        • by Junta ( 36770 )

          Not even that, you can always have numerical growth when at some level the number is made up.

          The currency strives to "model" an abstract whole bunch of stuff, including actual resources, labor performed, level of technological achievement, the psychology of those participating in the economy, offsets to account for 'lost' money, money locked away in a savigns account that won't be used ever, borrowed money, just everything really.

          So ultimately, with enough insight and control, you can generally assure that

    • They should be looking at net profits, year-to-year. If it increase or stays the same, then fine it's just business as usual.

      Those stats are meaningless without putting them into context with inflation. They might even be deeply misleading in determining business as usual or not. High gas prices and "record oil industry profits" are a good example. They are a great talking point for obscuring the fact that demand has slowed dramatically on gas and diesel and fuel price explosion by its very nature is a dang

  • They've been teasing new technology for MONTHS. Radeon 7000 and GeForce 4000 GPUS, Ryzen 7000 and Intel 13th generation CPUs . . . maybe, just maybe, actually releasing something will spark interest in buyers?
    • The problem is that buyers can't afford this shit. That diminishes interest.

      The most I've ever spent on a GPU has been about $165. You can't even touch one worth buying for that, new. I recently upgraded my potato to have a used 1070. That was $150! But a new card with better specs than my pre-overclocked (and therefore also binned) card is about $200. (And a used 1080 is $220+.) Inflation is real, but wage increases aren't.

  • by 4pins ( 858270 ) on Wednesday August 17, 2022 @12:23PM (#62797489) Homepage

    Q: When the pandemic hit and demand for work-from-home and home entertainment electronics skyrocketed, did this indicate a booming economy?

    A: No.

    Q: Now that: the pandemic is under control, people already have their gear for at home, and some people are returning to the office, does this indicate an economy in collapse?

    A: No, this is one sector going through an entirely predictable correction.

    Q: Do the above answers exclude the possibility of a broad-based economic downturn?

    A: No, that is still a possibility.

    Do me a favor. The next time we have a shortage of something and you are wondering why the producers of those products don't invest in greater production than is normally required to meet demand, remember this moment.

    • by aergern ( 127031 ) on Wednesday August 17, 2022 @12:38PM (#62797573)

      Folks need to ask themselves about the 3x inflation on graphics cards and about cars sitting 85% finished due to not enough chips.

      It is as you say but it's also the fact that with all the doom and gloom these "finance" folks are spewing ... of course, folks don't want to spend cash on products that have been marked up 30% just because they could be i.e. vehicles. Or say GPUs that were selling for triple MSRP. Hell, my 2080 TI was selling for as much or more than I paid for it in 2020 ... because manufacturers could not fill the demand for GPUs.

      It's a perfect storm, Wall St. scares the shit out of folks that there is a recession coming or ongoing ... typical reaction of layoffs and then they say demand for goods is down. No one is going to spend $800 to $2000 on a GPU if they are anxious about their job. It's a giant circle jerk.

  • by Anonymous Coward

    I wonder if various chip makers are doing this, just to keep the market starved for CPUs. I can see that happening because they are a monopoly on the economy, so they can act like oil/gas producers and keep supplies tight, to make their profits... and spike inflation.

    • I wonder if various chip makers are doing this, just to keep the market starved for CPUs

      I suspect TSMC is doing it because it's concerned that China will invade Taiwan and capture their plants. Why spend your capital to build more stuff for China to grab from you?

      I hear over 90% of the cutting edge chips are manufactured either in Taiwan (mainly by TSMC) or China, and plants finally being started elsewhere won't make their first chips for years. If you think there's a chip shortage now, you'll think it wa

  • by bb_matt ( 5705262 ) on Wednesday August 17, 2022 @01:48PM (#62797873)

    This is just a reflection of the global markets in entirety - that it's all based on continuous growth, above all else.
    That every quarter can and should deliver more growth and profit than the former.

    It's a form of madness.

    Consumerism is dying - and it's going to be very painful to experience, in the years ahead.

    We've had many eras of recession in the last century, in the "modern world", they all seem to be leading to a point that shows capitalism is not the answer.
    That the idea of "infinite growth" is absurd - to what end? What's the point of it? So that the 1% have more wealth and power than the 99%?
    What for? What's the actual "end game" here?

    There is none, because so much of the world is just spiritually and socially dead, chasing its own tail in a furious cycle of "more, more, more!"

    And sadly, we know where that leads - the end of this current civilisation.

    I used to scoff at "The end of the world is nigh" concept - the lone nutjob, carrying their sign - now I know it's true.

    We're hurtling toward the end game - accelerating toward it - with this bullshit expectation of continuous growth.

    Fuck sake, would be nice to just chill and say "Yeah, this is good enough, let's just keep things ticking over."

    • Productivity can continue to improve and even with fewer workers we can have vibrant growth.

      >We're hurtling toward the end game - accelerating toward it - with this bullshit expectation of continuous growth.
      Calm down and turn off the TV, things are not all that bad.
  • meanwhile, for the rest of us designing products that have nothing to do with PCs, we're faced with part lead times of a year or more, and parts suddenly no longer being available because somebody "made a deal" and bought them all, forcing time consuming redesigns. Tough to reconcile that reality with the article's claims.

    • Do you consider a Raspberry Pi a PC? It seems there's still a shortage of Raspberry Pi boards, as gleaned from a casual search of the usual online sellers like Adafruit and the entries in an site [rpilocator.com] that tracks the lack of stocks, showing rows of "No" in the "In Stock" column.
  • by ukoda ( 537183 ) on Wednesday August 17, 2022 @03:22PM (#62798241) Homepage
    You don't get to bitch about an expected lack of demand when you have fucked us around on supply for the last couple of year. What bunch of morons, I still have trouble buying a simple STM32 and these fuckwits are predicting they need to reduce investment?

    Here is my prediction: Chip makers who scale down investment in a time of global shortages will not be global players in the future semiconductor market.
  • Shouty McHeadline (Score:4, Insightful)

    by locater16 ( 2326718 ) on Wednesday August 17, 2022 @05:04PM (#62798577)
    Of course chip demand has tapered off, you (chip industry) idiots. Everyone that needed a laptop and a webcam to work remotely already bought one. The crypto dimwits got theirs so no more mining craze. And no one wants a new phone that costs $800 when their old phone does the same stuff. A global recession didn't need to happen for demand to fall dramatically.
  • Automakers and a lot of other manufacturers cannot get chips because they use chips made with older processes. I ordered a Ford that has the cool idea of using your foot to tap a button to open the rear door on an SUV, but now it won't have that feature because the chips aren't available.

    The drop in demand is likely for leading edge chips that use the latest 7nm and smaller topologies.

    Just because people aren't buying the latest laptops and phones doesn't necessarily mean the economy is cratering.

My sister opened a computer store in Hawaii. She sells C shells down by the seashore.

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