The business of the Californian chip provider is going much worse than expected.
(Photo: Reuters)
Munich First Micron, now AMD and Samsung: More and more large chip manufacturers are warning of an unexpectedly poor business trend – and are thus causing a sell-off of semiconductor stocks on the stock exchange.
It was clear that the chip boom would one day come to an end. But now sales are collapsing at a rate that is surprising companies and investors alike. AMD announced on Friday night that sales in the third quarter were around 15 percent lower than predicted in the summer.
Instead of 6.7 billion dollars, the US group only posted revenues of 5.6 billion. The Intel rival has specialized in processors, the brains of computers. “Macroeconomic conditions led to lower-than-expected PC demand and a significant inventory correction,” said CEO Lisa Su.
Investors are parting with AMD shares
Investors therefore threw masses of AMD shares out of their depots at the end of the week. In pre-market trading in New York, the price fell by around five percent on Friday. In the wake of AMD, the German chip company Infineon was one of the losers in the Dax. At lunchtime, the papers were almost one percent down at around 25.40 euros.
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The figures from Samsung Electronics, the largest chip company in the world, are also disappointing. Operating profit in the third quarter fell by almost a third to $7.7 billion, the South Koreans reported on Friday. Sales are also below expectations. It’s the first time since 2019 that the surplus is falling.
Samsung is active in many business areas, including smartphones. Most recently, however, the group generated by far the largest part of its profits with memory chips.
Last week, the memory chip specialists Micron and Kioxia reported significantly weaker business and at the same time announced that they would produce and invest significantly less.
The tremendous boom of the past two and a half years in the chip industry is over. In the warehouses of the electronics manufacturers, memory chips and processors in particular are piled up. According to market researchers at Trendforce, high inflation worldwide is dampening demand for PCs and laptops. They expect prices for the widespread, so-called DRAM memory chips to drop by 13 to 18 percent in the fourth quarter.
Infineon allocates its chips to customers
However, things aren’t as bleak everywhere as they are for AMD and Samsung. The weal and woe depends entirely on the range. The world’s largest contract manufacturer TSMC even slightly exceeded analysts’ expectations in the third quarter. In the third quarter, the Taiwanese’s turnover shot up by 48 percent to 19.4 billion dollars.
>> Read here: New billion dollar market: Intel chip company enters the software business
TSMC supplies almost all major chip manufacturers in the world, covering a wide range of semiconductor categories. Biggest customer is Apple. However, shares of TSMC fell 2.9 percent in the Taipei Stock Exchange on Friday after the results were released.
The German chip manufacturer Infineon also says that numerous products still have to be allocated to customers because capacities are scarce and demand is persistently high. This affects, among other things, semiconductors for electric cars. The Munich-based company has already raised its forecast several times in the fiscal year that ended on September 30th.
More: The chip industry discovers Germany – the Intel factory is just the beginning.