The demand for electronic products has weakened, and there has been a global surplus of chips

    According to the Chinese website of the Wall Street Journal, there has been a global surplus of chips. This oversupply means that the global chip shortage in the past two years under the super strong demand has suddenly passed. With the rise of interest rates, the decline of stock markets, and the rising worries about recession, consumer demand for electronic products has weakened.

    The report points out that the chip inventory is increasing, which is a microcosm of the economic environment. At present, the goods on the retailers‘ shelves are unsalable, and manufacturers of various products with strong demand at the beginning of the epidemic are facing the problem of surplus.

     For consumers, the current situation in the chip field is good news. They can get a lot of products faster than a year ago, sometimes even at a cheaper price. For chip manufacturers, this shift has triggered a wave of layoffs and capital expenditure cuts as companies try to repair the profitability eroded in recent months.

     It is reported that Sanjay Mehrotra, CEO of Micron Technologies, a memory chip manufacturer, said that the chip inventory level was "far higher than our target level". Last Thursday, the company announced results that were worse than Wall Street‘s expectations, gave a weak outlook, and said it would lay off about 10%.

    Lisa Su, chief executive of AMD, said that the company was trying to deal with this situation by reducing chip shipments below demand; PC manufacturing customers are making similar adjustments.

    According to the report, chip industry executives said that the situation is expected to gradually improve next year, but there is still uncertainty about when this industry, known for its ups and downs, will be ready for the next boom. Nvidia, the largest chip company in the United States by market value, said that the excess inventory may weaken the benefits brought by the recently announced new generation of ultra-high speed game graphics chips; Corporate customers are trying to consume existing inventory before replenishing and purchasing these latest processors.

    It is reported that it is not only the shipment of personal computers that has hit chip manufacturers. It is expected that the shipment of personal computers will show the largest decline in more than 20 years, and the sales of smart phones have been sluggish.

    Qualcomm, which provides chips for Samsung Electronics and Apple, has cut its sales forecast several times this year. The company said in November that it expected that the mobile phone market would remain depressed and chip inventory would rise.

    However, it is reported that despite the recent oversupply, chip industry executives are preparing for long-term growth in demand, which will require the establishment of more factories. The industry expects that the chip sales will double by 2030, and the global sales will exceed 1 trillion dollars.