The crisis in the semiconductor industry has forced manufacturers to increase their activity, as market demand has significantly exceeded their current capacity. TSMC had to increase its production of automotive chips by 30% in the first half compared to the same period last year. The nine leading chip manufacturers had a record $ 64.7 billion in finished product inventories by mid-year.
This is reported by the Japanese edition of the Nikkei Asian Review. Statistics from TSMC, Intel, Samsung Electronics, Micron Technology, SK hynix, Western Digital, Texas Instruments, Infineon Technologies and STMicroelectronics show that the listed companies increased the share of raw materials in the structure of stocks to a record 24% by the end of March this year. Everything indicated that they were going to increase the volume of production.
At the same time, the rate of increase in warehouse stocks lagged behind the rate of sale of finished products. On the other hand, the increase in stocks by itself cannot adequately reflect the state of affairs with the demand for chips. Automakers, for example, have learned a bitter lesson from the deficit that hit the industry at the end of last year, and now prefer to work not “on wheels”; but to form a stock of components for several months in advance. At the same time, automakers are trying to increase the number of chip suppliers in order to reduce risks.
Representatives of Infineon Technologies complained about excessive duplication of orders by customers; due to which the order book has already formed two years in advance.
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Duplicate orders are very difficult to isolate, but they can ultimately lead to surplus production. Omdia experts expect that in the memory chip market in the next half of the year; supply will exceed demand, and prices will go down. In the meantime, chip makers are successfully increasing their profits. The top ten market leaders in terms of capitalization together increased their net profit by 60% compared to the same period last year. TSMC and Intel intend to make significant capital investments in the construction of new production facilities; we expect a similar step from Samsung Electronics.
It is worth mentioning that the Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip maker, has recently surpassed Chinese tech giant Tencent to become the most valuable company in the Asian region.
The change in leadership comes amid a series of crackdowns on Chinese tech companies. Over the past few months, this has led to significant depreciation of assets for many companies, including Tencent and Alibaba. In turn, TSMC became the leader on 17 August. At the moment, the Taiwanese manufacturer is the most expensive company in Asia, its market capitalization reached $ 538 billion. Tencent came in second with an indicator of $ 536 billion. Among the three leaders we have Alibaba with a market capitalization of $ 472 billion.