back to article Demand for PC and smartphone chips drops 'like a rock' says CEO of China’s top chipmaker

Demand for chips needed to make smartphones and PCs has dropped "like a rock" – but mostly in China, according to Zhao Haijun, the CEO of China's largest chipmaker Semiconductor Manufacturing International Corporation (SMIC). Speaking on the company's Q1 2022 earnings call last Friday, Zhao said smartphone makers currently …

  1. SnOOpy168

    "smartphone makers currently have five months inventory to hand"

    No reason to increase prices or having a long lead time to delivery under the "shortage of components" anymore

    1. DS999 Silver badge

      It can still be more expensive for smartphone OEMs to source parts, so while they may have incentive to discount the models that are gathering dust on shelves that's unlikely to affect the pricing or production schedule for models that are moving.

      Slowing smartphone sales (and slowing auto production & sales in China due to the lockdowns) does take some of the pressure off the chip supply. But the lockdowns also affect the fabs in China producing a lot of their commodity chips that are in shortage like PMICs, so overall it may be a wash.

    2. bombastic bob Silver badge
      Mushroom

      Until the "parts hoarders" and "component price scalpers" take a GIANT LOSS, I'm not satisfied...

      (as in why does an RPi cost more than TWICE what it did 2 years ago, if you can even GET one?)

      1. badflorist

        "if you can even GET one"

        They're happy that you're happy that you apparently have many RPI's to fall back on while they sell their stock to large vendors.

        Eben Upton explains all this and more in this interview: https://www.theverge.com/22966155/raspberry-pi-ceo-interview-eben-upton-computer-chip-shortage-diy

        Also in that same interview, it's clear that war isn't good for IPO's so expect an IPO as soon as the war has ended (or forgotten).

        The Raspberry Pi Foundation uses us enthusiasts as free advertisers, we seem no longer a concern.

        To be fair though, maybe they should sell to these vendors as the RPI Model X isn't what it used to be and is more of a full blown desktop than anything IoT/MCU/SBC-enthusiast. The RPI has become a very high powered device and every tutorial with "RPI" and "LED" makes me a little sad as all those tutorials are effectively "How to light LEDs with a DESKTOP". So, I can see them selling these to vendors who are going to fit them for multiple higher powered applications such as signage or PoS or general graphical kiosks.

        1. druck Silver badge

          There are Pi Zero's and Pico's if you really want a more minimal LED experience.

      2. Jason Bloomberg

        (as in why does an RPi cost more than TWICE what it did 2 years ago, if you can even GET one?)

        Welcome to the Free Market.

        Raspberry Pi say they are producing roughly the same as they did last year, I recall 6 million, which is down on the year before or perhaps now the year before that.

        With commercial users getting priority, the backlog for other users growing, it is not surprising few appear for retail sale. The only choice is to buy or register an interests, get in line and wait for it, or buy at above usual prices.

        It is not just Raspberry Pi who are struggling to fulfil back order demands.

  2. Anonymous Coward
    Anonymous Coward

    But still ..

    .. absolutely no sign whatsoever of the by now merely mythical product called "Playstation 5" who surely must get their chips from there too.

    :)

  3. Anonymous Coward
    Anonymous Coward

    Wake up TI and ST to solve your EVER GOING LEAD TIME MISERY

    So then I would suggest: With this unused capacity, I would like to shout out to TI, NxP and ST to solve the ever going issue of extreme lead times.

    To all underperforming managers at TI, NxP and ST: Do what you should do, buy this slot and produce parts, for god sake.

    Yes and we are annoyed and frustrated. The only thing these 3 companies could come up with were price raise, even WITH ORDERS ALREADY GIVEN, a real real deep shame. I was not grown up doing business like this. And don't you dare to say not agreed to price raises, because then your order is scrapped from the book. Our disti's cannot do anything about this situation either. They are in the middle, handling phone call after phone call of unhappy customers.... And TI, NxP and ST, they are into deep silence, not indicating anything about improvements... You only can hope you get something out of them.

    The danger is that many companies we know are searching for parts in Azia, with prices from 3x to 40x of the original disti price. We do buy in Azia as well, but our "psychological limit" is 4x the original price. You can understand that this is pretty risky and the amounts we get are the bare minimal.

    This is written by a CEO of a small design company for machine electronic system parts. I am an anonymous coward for now, since I know that I am not speaking for myself alone, but for many many smaller electronics design companies, beeing into big troubles due to stock pileup and not able to finish production due to the bad production performance of TI, NxP and ST. The times to blame corona really are over now.

  4. OhForF'

    Closed wallets caused by Covid-19 lockdowns?

    China's buyers have closed their wallets – a response to strict and sweeping COVID-19 lockdowns across the country.

    In the rest of the world the lock downs resulted in a boost for consumer electronics but in China it is a reason for a decline in the same field?

    Unless delivery doesn't work for even online orders because of China's strict lockdown rules there's something wrong here.

    I wonder if those Chinese consumers that can afford the goodies already stocked up in the last years and the market is just saturated for now and that drop in demand just hasn't happened in the western markets yet.

    1. Yet Another Anonymous coward Silver badge

      Re: Closed wallets caused by Covid-19 lockdowns?

      Other countries threw money at the lockdowned people so they would go on a shopping spree, share prices would go higher and the rich shareholders would get richer.

      China's political system does not depend on the rich getting richer to keep the politicians in power.

    2. ThatOne Silver badge
      Facepalm

      Re: Closed wallets caused by Covid-19 lockdowns?

      > In the rest of the world the lock downs resulted in a boost for consumer electronics but in China it is a reason for a decline in the same field?

      Just shows that those are just hollow excuses and have nothing to do with any reality.

      How else could we change in a short time from a (long) period of "OMG no chips, back orders reach 6 months" to "OMG too many chips, 5 months inventory"? Chipmaker elves?

      It was clearly all just a sob story to raise prices (smartphone makers. I'm looking at you).

      1. Yet Another Anonymous coward Silver badge

        Re: Closed wallets caused by Covid-19 lockdowns?

        Its because the MMB are manipulating the chip market to force you to buy new phones with the secret feature

    3. Jason Bloomberg

      Re: Closed wallets caused by Covid-19 lockdowns?

      Unless delivery doesn't work for even online orders because of China's strict lockdown rules there's something wrong here.

      That does seem to be an issue in China where restricting travel and deliveries to a minimum is deemed essential to prevent spread, where delivery of essentials is prioritised over others.

      I am not convinced people being confined in buildings by welding the doors shut was state policy but it is clear there were much tighter and harsher lockdown restrictions in effect than in the west, fewer exceptions to keep industry running.

  5. djvrs

    Diversify

    Best diversify and make some chips for cars instead...

  6. Anonymous Coward
    Anonymous Coward

    Smoke And Mirrors, Finance Crisis ?

    Locking up millions of people for a virus as bad as a mild flu clearly means the Chicoms have to cover up something very bad.

    An Uprising ?

    Housing finance crisis ?

    General finance crisis ?

    Trying to support Vladimir "I end the world if you do not love me" by covert sanctioning ?

    Same goes for their friend, the Fat Kim. He is now also playing the lockdown game with his subjects.

    Remember, these are communist nations, run like one big secret service. Nothing is as it seems.

    They must cover up something and the virus is just their latest smoke.

  7. Randy Hudson

    Did the proof reader not even make it to the second sentence in the article?

    1. Yet Another Anonymous coward Silver badge

      I think he was feeling a bit under the weather, probably a virus going around

      1. Anonymous Coward
        Anonymous Coward

        Prolly

        One of these winter flus, hyped to the max by WEF Oligarchy and their Chicom Friends/Business Chummies.

  8. msobkow Silver badge

    Seriously? Nearly double digit billions population on the planet and he claims that the 44 million lost disposable incomes in Ukraine is responsible for their losses.

    Typical teflon suit - anything but accept blame for their own screw-ups.

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