Recently, news about a total chip shortage has been replaced by information about a mitigation of the situation.What's more, some reports suggest that TSMC is asking its employees to take a leave of absence as computer makers have noticeably reduced orders, and orders from smartphone makers have declined even further, a trend that will continue into 2023.Meanwhile, while some manufacturers are not experiencing any shortage of semiconductors, many companies are still suffering from acute shortages.Image source: МicronAs Forbes reports, while TSMC's leading customers - Apple, AMD, Intel, MediaTek, NVIDIA, and Qualcomm are constantly developing more and more advanced processors, they are currently very \"conservative\" about sales forecasts and, therefore, production orders.In other words, the leading electronics component vendors do not need many chips yet.This is not surprising, because in this sector demand is largely determined by demand for PCs, which, according to Gartner, in April 2021 rose to record levels, sales of the top six PC manufacturers grew at a double-digit percentage rate, and for some time, even triple-digit sales of Chromebooks.This trend could not last forever, and figures have already appeared on the sale of certain models of Chromebooks for literally $79 (in the US) - even components for them cost more, but the market is already crowded, and demand is satisfied for almost years to come.At the same time for the release of new models manufacturers have to free up their warehouses from old and expect high demand for components in this segment in the foreseeable future is not necessary.For example, in its latest earnings report Micron Tecnology reported that demand in the calendar year 2022 will on average be lower than supply, which will lead to a build-up of large stocks in the warehouses of suppliers.Scarcity typically initiates massive investments in building new capacity and mastering new process technologies, resulting in the occasional oversupply crisis.Surplus is observed in many industries-but not in all.In particular, there is no abundance on the market of chips for cars.The point is that most of the semiconductors for cars are produced according to the so-called \"mature\" process technologies, and most of the demand is for 90-nm semiconductors.These were considered the most advanced solution around 2002, 20 years ago.Nevertheless, they are quite in demand, since many components simply do not need ultra-modern technology, and the process of transition to it is costly and long.Image source: BMWFactories continue to use the old tools for production and, since this segment is not the most profitable, for most manufacturers there was no need to invest in new capacity.Such semiconductors weren't quite enough already by the beginning of the pandemic, and 2020 recorded about an eight-week period in which most auto factories had to partially or completely suspend operations due to sanitary restrictions, after which they withdrew their semiconductor orders.Meanwhile, explosive growth in other sectors requiring chips has put \"obsolete\" production capacity to full use, and as Forbes reports, when automakers tried to restart orders, delivery times for them catast
AMD in the midst of a pandemic already had to invest in its partners' capacity to produce the wafers used in making microprocessor components.This week, senior vice president Forrest Norrod explained that AMD is done with the shortage of wafers in the consumer segment, and the work done to optimize the TSMC process for the needs of the company is also very pleased.Image source: AMDSensitive statements Forrest Norrod made at the Goldman Sachs conference, which ended this week.AMD's component shortages, he admitted, have in recent months been determined not by the ability of TSMC or GlobalFoundries to supply its customer with processor chips, but by the limited supply of the substrates that are needed to make those processors.By the end of this year, according to Norrod, the shortage of substrates will be over in the consumer sector, and next year the problem will be eliminated in the server segment, where it is more acute.Forrest Norrod also spoke about the relations with the contractors in the context of the schedule of transition to new lithographic standards.Each new process step, he said, is carefully optimized by TSMC for AMD's needs.Moreover, the latter company puts forward different requirements to the technological process than, say, the developers of mobile processors for smartphones.In the case of 7nm technology, AMD was at the forefront of the market.As the senior vice president of AMD admits, during the transition to 5-nm technology, the process was a bit delayed, but it was due to market, not technical conditions.If we talk about the server segment, AMD expects to update the process every 18 or 21 months.The first results of the migration to 5-nm technology in AMD are very pleased.It should ensure the absolute leadership of the company both in terms of transistor performance and energy efficiency.The process itself does not determine the pace of progress of AMD products, as Norrod explained, the company proceeds from the market needs at a particular time.AMD senior vice president for investor relations Ruth Cotter (Ruth Cotter) added that the transition to each new stage of lithography is more expensive, so in determining the schedule of migration should also consider the payback factor, combined with the ability of new products to meet customer needs.AMD's heterogeneous chip layout helps tremendously in this regard.The process technology is only one factor driving AMD's product development, and at the core is the architecture, which is developed based on customer needs.
Chip makers and other electronics component suppliers have enjoyed huge profits over the past couple of years due to strong demand for their products.Nevertheless, the changing global economic environment could have a negative impact on both the performance of semiconductor suppliers themselves and the members of their supply chains.Image source: Alexandre Debiève/unsplash.comThe Wall Street Journal reports that a slowdown in the Chinese economy and economic fluctuations in the American technology sector will reduce demand for electronics from both consumers and corporate clients.Shipments of smartphones and computers have already begun to decline.Thus, according to IDC, in the first quarter of 2022 shipments fell by 8.9% compared with the first quarter of last year, and the supply of computers for the same period decreased by 5.1%.In general, the world as the pandemic restrictions are lifted customer interest is shifting from buying goods to services.The situation is exacerbated by the economic crisis and ongoing COVID-19 outbreaks in China.In the Celestial Empire, smartphone sales fell 14.1% in the first quarter.Across the Pacific, the drop in U.S.tech stocks has reduced demand for IT equipment, and previously wasteful IT businesses are forced to tighten their belts.For example, server chips for data centers were an important factor in the growth of the semiconductor industry for a couple of years, but spending cuts by technology companies could seriously change the situation.Although the shortage of semiconductors, which lasted more than 18 months, recently becomes less acute.The decline in demand could have a negative impact on companies that have accumulated large inventories of electronic components.East Asia, where most suppliers are located, could feel the negative effects of the drop in chip orders.Sanitary restrictions in Shanghai and other Chinese cities due to the COVID-19 outbreak are known to have caused a drop in supply and demand not only in mainland China itself, but also in neighboring economies - Taiwan and South Korea.Image source: Alexandre Debiève/unsplash.comSouth Korean exports rose slightly in May compared to the same month last year, but only because there were fewer working days in May in 2021.In contrast, exports of semiconductors and display panels fell compared to April, according to Morgan Stanley.The lifting of sanitary restrictions in Chinese cities may lead to short-term growth, but serious changes are not expected until at least early 2023.The situation is very complicated.Giants like TSMC are likely to be less affected due to their dominant market position, but smaller Asian businesses are likely to face tough times.
CFO Colette Kress said at a quarterly earnings call yesterday that retail finished goods inventories in the first fiscal quarter are almost at normal levels, and will remain so in the second quarter.The improved availability of graphics cards has been helped by a decline in miner activity and NVIDIA's own efforts to combat shortages.Source image: Getty ImagesJust recall that the book value of inventory at the end of April reached $3.16 billion compared to $1.99 billion a year earlier to appreciate the extent of the company's efforts to reduce the shortage of graphics processors.NVIDIA's financial liabilities to component suppliers reached $9.59 billion last quarter compared to $3.46 billion a year earlier, largely due to an increase in advance payments under long-term agreements from $1.84 billion to $3.06 billion.According to Colette Kress, the observed decrease in the speed of Ethereum mining network performance now may indicate lower activity by miners using video cards.It is known that in August the participants of the process may switch to the \"proof of stake\" model, which does not require the previous computing resources for the cryptocurrency ecosystem to function.If we talk about the supply of gas pedals CMP professional miners, in the first quarter, they were so modest that NVIDIA representatives have decided not even to name specific amounts of core revenue, stating only that it is far from the $155 million that was received a year ago.Demand for graphics cards may temporarily decrease due to lockdowns in China, the events in Ukraine and the approaching announcement of the new generation graphics solutions, which is scheduled for the second half of the year.All of these factors were also mentioned by NVIDIA CFO in her comments, explaining the reasons for the rebalancing of the gaming graphics cards market.At the same time, company founder Jensen Huang said at the quarterly conference that \"the fundamental dynamics of the gaming industry remain stable.\" According to him, over the past two years the audience of PC gamers has increased by 100 million people.NVIDIA representatives were not shy during the quarterly event several times to say that the company's customers are still limited in their abilities by the continuing shortage of server components.There will also be a gradual improvement in the availability of network solutions by the end of this year.It is in the networking segment that NVIDIA feels the problems with the supply of components the strongest, but the company is making enough efforts to systematically eliminate them.
AMD will unveil Radeon RX 7000 graphics cards on the latest RDNA 3 architecture graphics processors tonight. The start of the presentation,...