What They Say
Chinese chipmaker SMIC has said that it has seen demand for mobile phones, personal computers and home appliances drop “like a rock” and with no signs of recovery on the horizon, the Nikkei reported. Factors include the lockdowns in China and the impact of the Russian aggression on Ukraine.
“There are at least 200 million units of smartphones that will disappear suddenly this year and the majority of them are from our domestic Chinese phone makers.”
the firm said and revealed that some customers have up to five months of inventory. The changes may ease the chip shortage of the last couple of years.
Despite these headwinds, SMIC believes it will do better than other local foundry businesses and is still planning $5 billion of capex this year.
What We Think
An easing of the chip situation wouldn’t do any harm but there is bound to be a period of instability as inventories and supply chains get back to something like normal. (BR)
