Samsung Sounds Alarm About ’22 Chip Market Touchdown

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The reminiscence market is so risky that within the early 2000s, a number of corporations together with Enron sought to type a DRAM-futures buying and selling market.  Samsung, the most important maker of reminiscence chips on the planet, this week warned that the chip business could also be in for laborious touchdown by the tip of the yr.  

The market has modified drastically for the reason that first half of the yr, Kye Hyun Kyung, head of Samsung’s machine options division, mentioned yesterday throughout a uncommon briefing on the South Korean firm’s new chip fab in Pyeongtaek, based on a report by Bloomberg Information.  

The final notion earlier this yr was that the second half of 2022 can be higher than the primary. 

A Samsung consultant contacted by EE Occasions immediately declined to remark in regards to the forecast. The particular person did, nonetheless, level to a press launch confirming that the corporate had held a media occasion yesterday to announce it had begun NAND Flash manufacturing on its third manufacturing line in Pyeongtaek. 

Rendering of Samsung’s new manufacturing line in Pyeongtaek, Korea. (Supply: Samsung)

Two of Samsung’s main opponents, Micron Know-how and SK Hynix, have additionally signaled waning demand. CNBC reported the information out of SK Hynix. The South Korean chipmaker sees H2 server reminiscence chip demand slowing.  

Whereas the reminiscence market is understood for its sudden and wild value swings, nearly each electronics product made comprises a number of of those chips. Scaled-back reminiscence demand has implications for different semiconductor merchandise and the interconnect, passive, and electromechanical (IP&E) parts that populate printed circuit boards. 

Samsung’s chip operations account for roughly $21.8 billion of its $240 billion income in 2021. The Pyeongtaek facility is the most important chip-making operation ever constructed up to now, the corporate mentioned in ready remarks. 

“The Pyeongtaek campus is quick rising as Samsung’s key manufacturing hub for cutting-edge semiconductors starting from the world’s smallest 14-nanometer (nm) DRAM and modern V-NAND to sub-5nm logic options,” Kyung mentioned in ready remarks. “Our focus extends past manufacturing to embody all points of sustainability, from cultivating a extra environmentally pleasant office to pursuing shared progress with ecosystem companions and surrounding communities.” 

Semiconductor producers have introduced plans to construct about 29 fabs throughout the globe to higher reply to quickly altering market demand.  

Samsung, which has traditionally invested closely in superior chip manufacturing, intends to maintain capital expenditures regular, Bloomberg reported. 

However flagging gross sales aren’t the one headwind for Samsung. The U.S. authorities has demanded that any semiconductor firm benefiting from federal grants—a part of the not too long ago handed CHIPS Act—chorus from manufacturing chips in China for 10 years. Samsung plans to construct a $17 billion chip plant in Taylor, Texas, with building slated to start out later this yr. 

The U.S. authorities has additionally restricted gross sales of synthetic intelligence chips and cutting-edge chip gear to China to hinder the nation’s technological development. Samsung, like many electronics corporations, sells chips, smartphones, and different merchandise into the huge Chinese language market.  

The South Korean authorities is looking for to barter the restrictions with U.S. officers. 

Market-watcher TrendForce final week revised its 3Q22 NAND Flash wafer contract costs downward—once more. Costs have been anticipated to say no 15-20% whereas chipmakers lower costs to stimulate demand. That estimate is now 30-35%. 

“Wanting ahead to the value of NAND Flash wafers in 4Q22, as producers have already carried out a technique of sustaining market share in any respect prices, contract and spot market wafer pricing are going through collapse,” the agency mentioned.  

—Alan Patterson contributed to this report. 

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