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Chip Industry Had Worst Sales Year Since Dot-Com Bubble Burst (bloomberg.com) 29

Posted by BeauHD from the compare-and-contrast dept.
The semiconductor industry last year suffered its worst annual slump in almost two decades, hurt by a trade war between the largest chip producer, the U.S., and the largest consumer, China. Bloomberg reports: Revenue fell 12% to $412 billion in 2019, the Semiconductor Industry Association said Monday in a statement. That's the biggest drop since 2001, when industry sales slumped 32% as the dot-com bubble burst. The rate of decline last year abated with sales growing slightly in the fourth quarter from the preceding three-month period, the industry association said. For that to continue, China and the U.S. need to build on the phase one trade agreement announced last month.

Memory chips were the hardest hit. Prices of those commodity chips fell as production outran demand. Memory revenue dropped 33% from 2018 led by declines in computer memory. All regions experienced a decline in demand. Sales in China, whose consumers and factories that supply finished products to the rest of the world account for more than one-third of global consumption of the electronic components, fell 8.7%, according to the SIA. Sales in the Americas dropped the most of any region at 24%.
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Chip Industry Had Worst Sales Year Since Dot-Com Bubble Burst More

Chip Industry Had Worst Sales Year Since Dot-Com Bubble Burst

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  • I don't know if this is the worst year for /. dupes since the dot com bubble, but this is one of them [slashdot.org].

    • It's not that there are so many dupes. Some people just feel that the story wasn't conveyed in just the right way----again.

  • Stop posting the same damn stories: https://slashdot.org/story/20/... [slashdot.org]

  • There was a dip in dupe-detecting chipsets ever since Biz-X --- sorry, Slashdot Media -- took over Slashdot.

    I know there were dupes when humans were editors, but now that the eds are just scripts, well, it's gotten well out of hand.

  • Something's not right (Score:4, Interesting)

    by quonset ( 4839537 ) on Friday February 07, 2020 @07:33PM (#59703192)

    This story may be a dupe (I didn't see the first story), but this sounds like bullshit. If chip sales fell this dramatically, why is it we still have orders from last year waiting to be filled? Why is it we are told there is an Intel chip shortage if sales plunged?

    If sales dropped then that should mean there is an oversupply which in turn means there's no excuse other than laziness for not filling orders.

    I'm calling bullshit on the story. It's like employers who have been whining for decades they can't fill positions, even during the Bush recession when millions of people were laid off or fired.

    • Re: (Score:1)

      by Anonymous Coward

      I'm not saying this is the case, but one possible reason for your discrepancy is that chips aren't fungible: you can't fill orders for one model with another model. The Intel chip shortage you note, for example, seems to affect specific process sizes.

    • Intel's problems are specific to Intel's fabs and their inability to move beyond 14nm at the present. Essentially:

      Intel launched 14nm back in 2015 (belatedly) with the assumption that they would never eclipse 4c/8t on the desktop and 28c in the server on that process. Broadwell itself never got past 22c, but the later Skylake-SP did actually hit 28c.

      Now Intel has to sell 8c 14nm processors (Coffeelake) and will soon sell 10c 14nm processors (Comet Lake) on the desktop. They're packaging multiple 28c dice

      • The difference between a mature process node where the manufacturer's cost per wafer has become low is that when that happens to TSMC, THEY pocket the difference between production cost and the wafer cost they've contracted to NVidia, Qualcomm, AMD, Apple etc - but when that happens to a vertically integrated company like Intel, it has the ability to pass along savings from depreciated and amortized process like 14+++(n) to the chip group so it can lower ASPs (prices) without losing much margin. Owning fabs

        • It's not a cost issue, it's a supply issue. Those 14nm fabs can only produce so many wafers/second, and Intel has overcommitted die area to their current and future products. That's the problem.

          They haven't brought more capacity online fast enough to deal with it, either. They keep trying to update to 10nm . . . and failing.

    • It says "revenue", which is not necessarily the same as "sales". AMD basically forced prices down across Intel's entire product line. Consumers are getting better chips for less money now. Even OEMs/corporations now have a choice and can get better prices for server/workstation CPUs.

      If they include GPUs, then the cryptocurrency bubble may have affected revenue. It popped in 2018, but GPUs were probably being bought up for a little while after, causing high GPU prices for consumers. Once the craze wore

    • Re: (Score:1)

      by AHuxley ( 892839 )
      One good brand had a better year. One brand with problems had a bad year.

  • That is what happens when they shove in every bodies throat cheap underspeced tablets as PC replacements.
    Result also of virtualized servers.

  • And it will only get worse (Score:3)

    by LostMyBeaver ( 1226054 ) on Saturday February 08, 2020 @03:00AM (#59704302)
    Multiple news sources have reported that China is investing in a minimum of 14 major semiconductor plant projects. Some might say they lack the knowledge or experience to do this, but China has vast resources of scientists and engineers with CVs including MIT education and work experience at Intel, Global Foundries, TSMC and many others. They know exactly what they are doing and how.

    Huawei no longer ships servers running x86 chips for systems they develop. They have thrown tons of money into using their own ARM servers for everything they have control over.

    Huawei as well as many others in China have invested very heavily in Deepin Linux which is actually very good. Itâ€(TM)s the most user friendly Linux I have ever looked at. They have WPS Office which is extremely well made.

    The fact is, China will be able to avoid reliance on the U.S. for almost all semiconductors in the near future. They will also become extremely competitive in markets against Intel and Qualcomm. They will become a primary provider or DRAM and Flash.

    They will not just stop buying American technology, they will compete with it and improve it and they will have far shorter time to market with new technology than any western company.

    By teaching China that they cannot depend on the U.S., we have convinced them to invest in competing head on with all western tech companies... and they do and they will. The short term win was one thing... but this will be a major long term loss. Who cares if you can eat like a king today if youâ€(TM)ll starve like a pauper tomorrow?
    • A few observations: 1) Who cares if they invest in 14 semiconductor plants. There is already a glut of semiconductor plants and an excess of supply. Further, they won't be able to sell into the world market until they come to terms with the vast patent portfolios held by existing semiconductor companies. They may choose to support domestic industries, but that doesn't enable them to dominate the world market. 2) If they are investing in 14 semiconductor plants, Applied Materials must be smiling. 3) Given

  • Cause guess where that money comes from!

    How much of it is due to AMD breaking Intel's price gouging dominance, by the way?
    Or more genral: How much is simply due to products becoming less overpriced?

    Conclusion: What a horrible, horrible catastrophe! I am truly saddened! All that money not stolen from people's pockets! How will they cope?

  • The world just doesn't have enough innovative programming implementations to keep driving hardware sales. One problem is when markets diversify, like into the global world, you get a ton of redundant and fairly worthless programming hours that MAYBE could have been spent better. VR and augmented reality have been slow. IOT doesn't require a lot of hardware so it will have a hard time driving the whole market. Smartphones are not living up to their hype and have resorting to attempting to sell you on camera
  • The extortionate prices charged by companies that thought they had a stranglehold on the market are dissipating as competition serves to regulate them to something closer to modest profit levels.

    Boo hoo, I feel so bad for the chip companies.

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