The global shortage of computer chips could slow down. Autoblog suggests that demand for chips may be declining as rapidly as it did two years ago when the Covid 19 pandemic hit and moved many people to work and learn online. That’s why the demand for laptop computers and smartphones is exploding, sucking up the supply of chips and leaving little for automakers at a crucial moment when cars become more like computers. on wheels.
Citing report by Reuters, Autoblog says chipmakers Micron and AMD say rising inflation is slowing economies around the world which in turn has led to reduced demand for laptops and smartphones. Ranjit Atwal, senior director analyst at Gartner, said the fall in smartphone and PC sales will result in a reduction in chip shortages this year.
Atwal, who expects chip demand and supply to be the same next year, predicts that the cycle will be carried forward this year. He said the declining smartphone market is not expected to recover from any surge in chip demand from automakers.
Micron Technology, a maker of memory chips, predicted on Thursday worse -than -expected earnings for the current quarter and said the market was “very weak in the short term.” Chip stocks fell on Friday for TSMC and MediaTek in Taiwan, Dutch chip-gear maker ASML, Franco-Italian firm STMicroelectronics and Infineon in Germany. Smartphone sales have dropped 30% in China so far this year.
TSMC, the world’s largest contract chipmaker, has seen its major clients cut chip orders for the remainder of 2022. Samsung Electronics, the world leader in memory chips, has temporarily suspended new purchase orders and asked some suppliers to require or cut shipments of components for several weeks, the Nikkei said last month.
“I think the scope of the transfer is definitely bigger than anyone expected in the ecosystem,” Micron’s chief business officer, Sumit Sadana, said Thursday. In addition, inflation is the highest in years in many countries including the United States, increasing the risk of recession and leading to job cuts and tightening budgets.
Chip Demand Is Decreasing
Throughout the pandemic, chip makers have been overwhelmed trying to meet large orders from makers of smartphones and personal computers which has seen a surge in demand from people working from home. The resulting chip shortage has led companies, including automakers, to decline production, delay shipments, and pay high premiums for key chips.
Earlier this week, Volkswagen said chip shortages were shrinking and that it was starting to see an end to supply chain bottlenecks and rising costs. In March, the company warned that supply bottlenecks could hurt growth this year after 2 million fewer cars were sold than planned last year due to the chip crunch.
The rapidly changing markets caused by the coronavirus have completely confused many industries. Car rental companies, expecting much lower business, rushed to sell their fleets of cars, to find demand was stronger than expected, leading to a strong increase in rental prices. Chip makers are blinded by the virus and the market is shifting with it. Now those are up once again as the market moves in the opposite direction.
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