Consumer tech and the PC market in particular have entered a slump, taking the semiconductor industry down with it. Last week, memory maker and smartphone manufacturer Samsung Electronics reported a 32 percent year-on-year drop in operating profit for the third quarter – its first profit fall in three years. Processor maker AMD released an updated guidance statement slashing its previous estimate of 6.7 billion dollars in quarterly revenue by over a billion dollars. Weak PC demand and supply chain issues are also dragging down chipmakers Nvidia and Intel. Only bellwether TSMC seems to be bucking the trend, reporting healthy Q3 revenue growth and 48 percent higher profits compared to last year.
A slowdown in consumer electronics markets had been previously noted after the pandemic-driven peak in demand had passed. Fears of a recession are now enforcing that trend, analysts say. OEMs have dialed down orders and are starting to burn through their inventories. US restrictions on the export to Chinese companies are also hampering business.
So far, there haven’t been any indications that other semiconductor markets, such as automotive and industrial, have slowed down. Companies in those sectors will soon report Q3 results. It will also be interesting to see how ASML views the situation. The equipment maker will publish third-quarter results on 19 October.