Tokens are falling as demand dwindles
A global chip shortage that has lasted about two years is leading to a sudden shift towards an oversupply of semiconductors for smartphones and personal computers, as consumer demand for some electronics has been weaker than expected lately, said experts.
The comments came after global PC shipments saw the biggest decline in nine years during the second quarter, which reduced demand for the industry’s chips, according to market research firm Gartner Inc.
Mikako Kitagawa, research director at Gartner, said the first-quarter decline accelerated in the second quarter, due to factors including inflationary pressure on spending and a sharp drop in demand for Chromebooks.
“Supply chain disruptions have also continued, but the main cause of PC delivery delays has shifted from component shortages to logistical disruptions,” Kitagawa said.
Chipmakers are among the first to notice the downward trend in demand. U.S. chip company Micron Technology Inc said in late June it would cut production, raising fears that after nearly two years of strong demand, the semiconductor industry is heading into a down cycle.
The same has also happened in the global smartphone market. Although the latest data for the second quarter has yet to be released, first-quarter data showed global smartphone shipments were down 11% year-on-year to 311.2 million units, according to the Canalys market researcher.
In April, China’s mobile phone shipments stood at 18.08 million units, down 34.2 percent year on year, the Chinese Academy of Information and Communications Technology said. .
Xu Qi, vice president of Realme, a rising Chinese smartphone brand, said earlier that the shortage of cellphone chips had eased since the start of this year and prices for some chips had come down.
Declining demand for smartphones and personal computers is affecting the global semiconductor industry, said Xiang Ligang, general manager of the Information Consumption Alliance, a telecommunications industry association.
This marked a reversal of the situation from the previous two years, when supplies of crimped chips struggled to meet growing demand from digital product manufacturers and service providers amid accelerated digital transformation necessitated by COVID- 19.
Although a glut of chips emerged in some sectors, the auto industry‘s demand for semiconductors remained healthy, Xiang said.
Kurt Sievers, CEO of NXP Semiconductors, the world’s largest automotive chipmaker, said earlier that as automobiles become more electrified, smarter, and internet-connected, the number of devices electronics per car is growing rapidly, driving demand for automotive chips. . China will experience strong growth in this aspect in the coming years.