Leading Chinese chip maker Semiconductor Manufacturing International Co (SMIC). has stated that the global demand for personal computers, mobile phones, and various other home gadgets has dropped steeply, and there were no apparent signs of recovery.
The CEO of SMIC, Zhao Haijun, in a meeting with investors, said that the Ukraine conflict along with China’s long lockdown gave a huge dent in the demand for consumer electronics. This lessened demand has forced a “serious” adjustment in micro-chip orders in those respective segments.
Zhao also said that there is no end in sight to the downfall of demand. There will be around 200 million smartphone units that will disappear this year all of a sudden, with the majority of phones being of Chinese origin. The demand for consumer electronics has literally “dropped like a rock,” with many customers of SMIC having in excess of 5 months’ inventories.
However, SMIC’s factories are running at full capacity because the company is allocating resources to those products that are in shortage, like power chips and microcontrollers that are indispensable for green energy, industrial applications, and EVs.
Zhao added that SMIC is also cautious regarding the long-term impacts of the chain of supply, which includes packaging of chips, chip testing, and as well as other supplies in the overall supply chain. He does not expect these impacts to go away anytime in this quarter.
Another point of consideration is the rise in manufacturing costs. This has caused negotiations between SMIC and clients in a bid to raise its own prices. Overall the consumer electronics market is glum indeed this year.