When will the chip industry emerge from its darkest hour
From last year, the consumer electronics market is a sluggish, chip supply and demand reversal, from "grab the chip" into "to inventory", the chip industry "cold air forced".
Entering 2023, the chip industry winter continues, the industry as a whole is still in the downward bottoming stage. According to the World Semiconductor Trade Statistics (WSTS) forecast, the chip market size in 2023 will decrease by 4.1% year-on-year to $556.5 billion, after four years of negative growth.
Recently, chip makers have released their latest quarterly earnings reports, with the gradual release of performance data, the 2023 semiconductor market is how to interpret the market? When will the chip industry come out of the "darkest hour"? Are there any differences in the situation and feelings of different players in the industry chain?
We look through the latest quarterly earnings reports of major semiconductor manufacturers, to understand the answers behind these questions one by one.
Consumer electronics chips are not picking up
The PC market has encountered the difficulty of a sharp decline in demand, with shipments hitting a new low in more than 10 years, and the results of the two major CPU manufacturers, AMD and Intel, are not looking good.
- Intel: revenue hit a record low since 2010
Not long ago, Intel released the first quarter of fiscal year 2023 results show that the first quarter revenue of $ 11.7 billion, down 36% compared to $ 18.4 billion in the same period last year, creating a record low since 2010, and 2 consecutive quarterly losses; net loss of $ 2.8 billion, a year-on-year plunge of 134%.
The poor performance of the major businesses also reflects the challenges faced by Intel from the side.
To Intel PC, notebooks, including the client computing business group (CCG), for example, the first quarter revenue reached $5.8 billion, down 38% year-on-year. This is partly due to continued weak market demand, IDC estimates that global PC shipments fell by nearly 30% in the first quarter of 2023; on the other hand, the processor market changes continue to ferment, Apple switched to its own chips, AMD to catch up, so that the formerly dominant in the field of Intel suffered a shock.
On the other hand, the demand for chips in data centres has declined in recent months, bringing further pressure on Intel's performance. At the same time, Googl, Amazon and other cloud giants have moved towards designing their own chips; Nvidia CPU iteration accelerated; Arm camp is eyeing, under the layers of the cause, Intel data centre and AI business (DCAI) revenue of $3.7 billion in the first quarter, a heavy drop of 39%.
A string of numbers made Intel's earnings report rather gloomy. As for the future trend of the industry, Intel CEO Kissinger believes Intel is heading for a mild rebound.
End market demand will come out of weakness or become a note of confidence in Intel. In the PC field, Intel believes that inventory adjustment is basically as expected, by the end of the second quarter the market will be at a healthy inventory level, the PC market is expected to achieve about 270 million units of sales in 2023.
In the server segment, Intel expects the overall market size to decline year-over-year in the first half of 2023 while seeing a modest rebound in the second half.
While demand trends in markets such as industrial, automotive and infrastructure are relatively strong, Intel sees continued strong growth momentum in PSG, IFS and MBLY to deliver year-over-year growth in 2023
-AMD: First revenue decline in 2019
After Intel posted a record quarterly loss, AMD was also clearly hit by the continued downturn in the personal computer (PC) market.
Recently, AMD released its Q1 results for the quarter ended April 1. In the first quarter of 2023, AMD's revenue was US$5.353 billion, down 9% year-on-year; net loss was US$139 million, down a whopping 118% compared to US$786 million a year earlier.
This is AMD's first revenue decline since 2019, with Ryzen processors being the hardest hit, further highlighting the dilemma of a significant decline in PC sales.
Broken down, including desktop and notebook PC processors and chipsets, AMD's customer business unit reported revenue of $739 million in the first quarter, a sharp drop of 65.2% year-on-year; operating profit was a loss of $172 million compared to a profit of $692 million in the same period last year.
Q2 quarterly revenue forecast, AMD expects revenue of $5.3 billion, up or down $300 million, between $5-5.6 billion, according to the median calculation will be down 19.1% year-on-year, meaning that the second quarter results will also decline.
But AMD says the worst is soon to be over, similar to the previous statement from Intel CEO, AMD CEO Zifeng Su said: "With the strength of the PC and server markets and the addition of our new products, we remain confident of growth in the second half of the year."
Gartner data showed that global PC shipments fell 30 percent year-on-year to 55.2 million units in the first quarter of this year. While weakness in the PC business continues to hit chipmakers, there is an industry view that the PC market may have hit bottom.
And outside of PCs, smartphone shipments also fell to a freezing point.
- Qualcomm: mobile phone market demand is still continuing to decline
In February this year, Qualcomm also delivered a "cold" forced financial results, disclosed the financial report for fiscal year 2023 Q1, revenue of $ 9.463 billion, down 12%; net profit of $ 2.235 billion, down 34% year-on-year.
Specifically, Qualcomm chip business QCT revenue of $ 7.89 billion, down 11% year-on-year, including mobile phone chip revenue of $ 5.75 billion, down 18% year-on-year; technology licensing sector QTL business revenue of $ 1.52 billion, down 16% year-on-year, the main source of revenue in this sector is to collect the right to use cellular patents.
As for the reasons for the slowdown in earnings growth, analysis says there is a direct link to the slump in two major business lines, the chip business QCT and the technology licensing division QTL.
Not surprisingly, Qualcomm's performance has declined against the backdrop of tightening smartphone dividends.
But this is not the end of the story, as Qualcomm CEO Cristiano Amon said that mobile phone market demand continues to decline and that continued growth in channel inventory is expected to continue at least through the first half of the year. Demand is particularly weak in the mid- to low-end handset market.
Recently, Qualcomm released its fiscal year 2023 second quarter results, the second quarter revenue of $9.275 billion, compared with $11.164 billion in the same period last year, a decline of 17%; net profit of $1.704 billion, compared with $2.934 billion in the same period last year, a decline of 42%.
- MediaTek: results hit low point in nearly nine quarters
On April 28, chip design major MediaTek announced its first quarterly earnings report for 2023.
The results were affected by customer inventory adjustments and weak demand. MediaTek's revenue for the first quarter of 2023 was NT$95.652 billion, down 11.6% sequentially and 33% year-on-year; net profit after tax was NT$16.874 billion, down 8.7% sequentially and 49.3% year-on-year, dipping to a low point in nearly nine quarters.
Entering 2023, the chip industry winter continues, the industry as a whole is still in the downward bottoming stage. According to the World Semiconductor Trade Statistics (WSTS) forecast, the chip market size in 2023 will decrease by 4.1% year-on-year to $556.5 billion, after four years of negative growth.
Recently, chip makers have released their latest quarterly earnings reports, with the gradual release of performance data, the 2023 semiconductor market is how to interpret the market? When will the chip industry come out of the "darkest hour"? Are there any differences in the situation and feelings of different players in the industry chain?
We look through the latest quarterly earnings reports of major semiconductor manufacturers, to understand the answers behind these questions one by one.
Consumer electronics chips are not picking up
The PC market has encountered the difficulty of a sharp decline in demand, with shipments hitting a new low in more than 10 years, and the results of the two major CPU manufacturers, AMD and Intel, are not looking good.
- Intel: revenue hit a record low since 2010
Not long ago, Intel released the first quarter of fiscal year 2023 results show that the first quarter revenue of $ 11.7 billion, down 36% compared to $ 18.4 billion in the same period last year, creating a record low since 2010, and 2 consecutive quarterly losses; net loss of $ 2.8 billion, a year-on-year plunge of 134%.
The poor performance of the major businesses also reflects the challenges faced by Intel from the side.
To Intel PC, notebooks, including the client computing business group (CCG), for example, the first quarter revenue reached $5.8 billion, down 38% year-on-year. This is partly due to continued weak market demand, IDC estimates that global PC shipments fell by nearly 30% in the first quarter of 2023; on the other hand, the processor market changes continue to ferment, Apple switched to its own chips, AMD to catch up, so that the formerly dominant in the field of Intel suffered a shock.
On the other hand, the demand for chips in data centres has declined in recent months, bringing further pressure on Intel's performance. At the same time, Googl, Amazon and other cloud giants have moved towards designing their own chips; Nvidia CPU iteration accelerated; Arm camp is eyeing, under the layers of the cause, Intel data centre and AI business (DCAI) revenue of $3.7 billion in the first quarter, a heavy drop of 39%.
A string of numbers made Intel's earnings report rather gloomy. As for the future trend of the industry, Intel CEO Kissinger believes Intel is heading for a mild rebound.
End market demand will come out of weakness or become a note of confidence in Intel. In the PC field, Intel believes that inventory adjustment is basically as expected, by the end of the second quarter the market will be at a healthy inventory level, the PC market is expected to achieve about 270 million units of sales in 2023.
In the server segment, Intel expects the overall market size to decline year-over-year in the first half of 2023 while seeing a modest rebound in the second half.
While demand trends in markets such as industrial, automotive and infrastructure are relatively strong, Intel sees continued strong growth momentum in PSG, IFS and MBLY to deliver year-over-year growth in 2023
-AMD: First revenue decline in 2019
After Intel posted a record quarterly loss, AMD was also clearly hit by the continued downturn in the personal computer (PC) market.
Recently, AMD released its Q1 results for the quarter ended April 1. In the first quarter of 2023, AMD's revenue was US$5.353 billion, down 9% year-on-year; net loss was US$139 million, down a whopping 118% compared to US$786 million a year earlier.
This is AMD's first revenue decline since 2019, with Ryzen processors being the hardest hit, further highlighting the dilemma of a significant decline in PC sales.
Broken down, including desktop and notebook PC processors and chipsets, AMD's customer business unit reported revenue of $739 million in the first quarter, a sharp drop of 65.2% year-on-year; operating profit was a loss of $172 million compared to a profit of $692 million in the same period last year.
Q2 quarterly revenue forecast, AMD expects revenue of $5.3 billion, up or down $300 million, between $5-5.6 billion, according to the median calculation will be down 19.1% year-on-year, meaning that the second quarter results will also decline.
But AMD says the worst is soon to be over, similar to the previous statement from Intel CEO, AMD CEO Zifeng Su said: "With the strength of the PC and server markets and the addition of our new products, we remain confident of growth in the second half of the year."
Gartner data showed that global PC shipments fell 30 percent year-on-year to 55.2 million units in the first quarter of this year. While weakness in the PC business continues to hit chipmakers, there is an industry view that the PC market may have hit bottom.
And outside of PCs, smartphone shipments also fell to a freezing point.
- Qualcomm: mobile phone market demand is still continuing to decline
In February this year, Qualcomm also delivered a "cold" forced financial results, disclosed the financial report for fiscal year 2023 Q1, revenue of $ 9.463 billion, down 12%; net profit of $ 2.235 billion, down 34% year-on-year.
Specifically, Qualcomm chip business QCT revenue of $ 7.89 billion, down 11% year-on-year, including mobile phone chip revenue of $ 5.75 billion, down 18% year-on-year; technology licensing sector QTL business revenue of $ 1.52 billion, down 16% year-on-year, the main source of revenue in this sector is to collect the right to use cellular patents.
As for the reasons for the slowdown in earnings growth, analysis says there is a direct link to the slump in two major business lines, the chip business QCT and the technology licensing division QTL.
Not surprisingly, Qualcomm's performance has declined against the backdrop of tightening smartphone dividends.
But this is not the end of the story, as Qualcomm CEO Cristiano Amon said that mobile phone market demand continues to decline and that continued growth in channel inventory is expected to continue at least through the first half of the year. Demand is particularly weak in the mid- to low-end handset market.
Recently, Qualcomm released its fiscal year 2023 second quarter results, the second quarter revenue of $9.275 billion, compared with $11.164 billion in the same period last year, a decline of 17%; net profit of $1.704 billion, compared with $2.934 billion in the same period last year, a decline of 42%.
- MediaTek: results hit low point in nearly nine quarters
On April 28, chip design major MediaTek announced its first quarterly earnings report for 2023.
The results were affected by customer inventory adjustments and weak demand. MediaTek's revenue for the first quarter of 2023 was NT$95.652 billion, down 11.6% sequentially and 33% year-on-year; net profit after tax was NT$16.874 billion, down 8.7% sequentially and 49.3% year-on-year, dipping to a low point in nearly nine quarters.
