This photo provided by Samsung Electronics Co. on May 21, 2020, shows the company’s chip plant in Pyeongtaek, south of Seoul.
SEOUL, Jan. 19 (Korea Bizwire) — Global semiconductor revenue grew only around 1 percent on-year last year, a recent report showed Thursday, with the memory chip sector suffering the most.
According to tech research firm Gartner, worldwide chip revenue is estimated to have risen 1.1 percent to US$601.7 billion in 2022, a significant drop from a 26.3 percent annual growth seen the previous year.
While 2022 got off to a relatively good start due to lingering chip shortages, Gartner said “by the second half of 2022, the global economy began to slow under the strain of high inflation, rising interest rates, higher energy costs and continued COVID-19 lockdowns in China, which impacted many global supply chains.”
“Consumers also began to reduce spending, with PC and smartphone demand suffering, and then enterprises starting to reduce spending in anticipation of a global recession, all of which impacted overall semiconductor growth,” it said.
The memory chip sector was the hardest hit. Global memory chip revenue declined 10 percent year-over-year, as “electronic equipment OEMs started to deplete memory inventory they had been holding in anticipation of stronger demand.”
An OEM, or original equipment manufacturer, is a company that builds components or systems that are used in production of another company’s systems or products.
But the non-memory sector grew 5.3 percent, with performance varying across the different device categories.
The analog and discrete chip sectors saw their revenue grow by 19 and 15 percent, respectively, Garner said, driven by “strong demand from the automotive and industrial end markets underpinned by secular growth trends in vehicle electrification, industrial automation and energy transition.”
Discrete chips refer to semiconductors with a basic function that cannot be divided up into other functions.
Samsung Electronics Co. topped the chipmaker list by revenue, with a 10.9 percent market share, but its chip revenue declined 10.4 percent on-year last year due mainly to drops in memory chip sales, it said.
Samsung, the world’s largest memory chip maker, was followed by Intel Corp. at 9.7 percent, SK hynix Inc. at 6.0 percent and Qualcomm at 5.8 percent.
TSMC, the world’s biggest contract chip maker, was not included in the research.
This photo, taken on Oct. 20, 2020, shows South Korean chipmaker SK hynix Inc.’s plant in Icheon, south of Seoul. (Yonhap)
Earlier this month, Samsung Electronics released a disappointing earnings guidance for the October-December period.
The South Korean tech giant forecast operating profit in the fourth quarter to plunge 69 percent from a year ago to 4.3 trillion won ($3.4 billion), compared with 13.87 trillion won from the year-ago period.
The company partly blamed lower chip demand from server clients, data centers and handset makers for its weak performance.
Analyst Kim Dong-won from KB Securities forecast Samsung will “indirectly reduce production” of memory chips, by reorganizing manufacturing lines, delaying its plan to add more production facilities and accelerating its move to focus on more advanced chips.
Such moves will cut Samsung’s chip production starting from the second quarter, Kim said, ultimately resulting in a 7 percent drop in global supply of DRAM and NAND flash in the second half.
Samsung is set to release its Q4 earnings results on Jan. 31.
(Yonhap)
