Paul van Gerven
14 July

Concerns of a semiconductor downturn have eased somewhat now that TSMC has posted better-than-expected Q2 results and raised its full-year guidance. Last week, Samsung Electronics upwardly revised its revenue outlook for Q2, also providing comfort to the semiconductor supply chain.

Along with rising inventories, fears of a chip recession were stirred when Micron reported its fiscal Q3 results. Up 19 percent year-on-year, the memory maker’s quarter was strong enough, but its guidance for Q4 wasn’t. Projecting a sequential sales drop of 17 percent in what’s typically the strongest growth period of the year, industry watchers started to wonder if Micron was “the canary in the coal mine,” as IC Insights put it.

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“It currently appears that Micron has given us an early warning that the 3Q22 memory market will be extremely weak,” the market analyst concluded. Global demand for electronics, however, may be holding up better than feared – at least for the time being. With TSMC moving some capacity and upgrade spending to next year, however, it’s clear that caution remains in order.

Semi still projects record sales of semiconductor equipment this year, climbing 14.7 percent to 117.5 billion dollars. Next year will see modest growth to 120.8 billion dollars.