Global chip stocks plunge after Micron’s (MU) poor forecast, waning demand

July 02, 2022 04:38 AM AEST | By Mridul Gogoi
 Global chip stocks plunge after Micron’s (MU) poor forecast, waning demand
Image source: © Rdboes | Megapixl.com

Highlights:

  • Chip stocks plummet globally on Friday after a discouraging forecast by Micron Technology.
  • Micron Technology Inc (Nasdaq:MU) said it sees worse-than-expected revenue for the present quarter.
  • Semiconductors were in short supply during the pandemic as demand soared.

Chips stocks plummeted globally on Friday after Thursday’s bleak forecast by memory chip maker Micron Technology Inc (Nasdaq:MU). The company said that it expects its revenue for the current quarter to be much worse than earlier estimates.

The company said that the market had gone down severely in a short period.

Along with Micron, other chipmakers, including AMD, have also pointed toward a decreasing demand as high inflation pulls the plugs on spending.

However, the global shortage of semiconductors has begun to ease a bit after two years, which impacted the production of everything ranging from cars to smartphones.

Shares of companies like Taiwan's TSMC, Dutch chip-gear maker ASML, MediaTek, Infineon from Germany, and STMicroelectronics declined on Friday.

Global chip stocks plunge after Micron’s poor forecast, waning demand © Mohammedsoliman4 | Megapixl.com

Chip stocks worst sufferers of S&P 500 on Friday

Chip stocks saw the biggest fall on the S&P 500 on Friday. The Philadelphia Semiconductor index (.SOX) plummeted 3.5% after sliding 35% in the first half of the year.

It was a different story during the pandemic. Chipmakers were flooded with big orders from smartphones and personal computers companies during the lockdown as demand soared from people who were working from home.

It was the harvest period for chipmakers during the lockdowns. The acute shortage of chips forced the client companies, including automakers, to cut production, delay shipments, and pay higher prices for key chips. Global executives had even issued warnings about supply chokepoints due to the recent lockdowns in China.

According to research firm Gartner, industry-wide shipments of smartphones to China are likely to contract by 18% this year. Due to the supply chain disruptions, global shipments are likely to shrink by 7%, the research firm said.

Bottom line:

On the other hand, surging inflation across the globe has compelled consumers to cut their expenses, with China’s curbs also slashing demand. This is another reason why sales of smartphones and PCs have declined sharply and affected the chipmakers in the bargain.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.


AU_advertise

Advertise your brand on Kalkine Media

Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.