Semiconductor industry is facing oversupply crisis, according to Japanese media reports, the world's top 10 semiconductor revenue in the first quarter is expected to continue to deteriorate, only Broadcom (Broadcom) to maintain growth, but the growth rate has also slowed down significantly.

The Nikkei Chinese network reported that the performance of the world's large semiconductor companies is further deteriorating, January-March 2023 (some companies for February-April, etc.), as many as 9 of the 10 companies show a decline in revenue, the annual decline between 3-51%, only Broadcom is expected to grow, but the annual growth rate is only 8%, compared with the annual growth of 16% in the fourth quarter of last year, a significant slowdown.

The report listed the performance of the world's top 10 semiconductor companies, in addition to Broadcom will increase by 8%, the remaining nine are receding, including Micron is expected to decline by 51%, SK Hynix second decline also amounted to 50%, the United States Intel, Nvidia and Qualcomm, respectively, a decline of 40%, 22% and 18%; others include Samsung annual decline of 15%, Texas Instruments reduced by 11%, Supermicro reduced by 10%, Taiwan factory TSMC is an annual decline of 3%.

The report further analyzed that the main reason for the continued deterioration of the recession of semiconductor makers is the downturn of products for people's livelihood, in the context of receding demand and economic slowdown, personal computers and smartphone manufacturers have significantly increased their inventories.

The report pointed out that, from the final profit and loss of market expectations, the world's top 10 semiconductor companies in the first quarter is expected to have four losses, five profits decreased, showing that the semiconductor recession situation intensified.

Global semiconductor, down 5%

Reuters quoted Allianz Trade latest research reports, the global semiconductor market sales this year is expected to decline by about 5%, accounting for 80% of the consumer electronics, computer and communications industries will be declining. Even if the mainland demand is expected to rebound, but still unable to restore the overall market sales decline dilemma.

The report points out that only when the retailer to the consumer electronics company to the semiconductor design and production and other links of the inventory are completed, the market demand for semiconductors will have the opportunity to rebound.

The report also mentioned that consumers in mainland China may drive a faster recovery of the semiconductor market, the mainland is the world's electronic equipment base, and is the largest smartphone and the second largest computer consumer market, these two areas will benefit from the mainland to untie the epidemic prevention measures and the excess savings of local consumers, helping to ease the European and North American markets by the high inflation hit caused by the decline in purchasing power.

The report points out that, for the time being, the growth in demand for semiconductors on the mainland is still not enough to raise overall shipments in 2023, but any major positive surprises at the consumer level could accelerate the recovery in semiconductor demand.

In this way, the Asia-Pacific region, which accounts for 75% of global semiconductor manufacturing capacity and 90% of semiconductors, will be in the most unfavorable situation. According to the report, Allianz Trade analyzed the semiconductor trade balance and export ratio of Asia's major wafer export markets and found that Taiwan, South Korea, Singapore, Malaysia, the Philippines and Japan face the greatest risk. Among them, South Korea was hit the hardest, the reason is the relatively high degree of dependence on memory chips.

The report analyzes that the decline in semiconductor prices and the increase in chip supply is good news for the mainland. Mainland 2021 semiconductor imports amounted to 433 billion U.S. dollars, the chip brought a trade deficit of 278 billion U.S. dollars. Falling component prices will more or less ease the burden on computer and smartphone manufacturers, and will be felt by businesses and consumers seeking to replace or upgrade their IT equipment.