As I often mentioned the chip industry is very wide and heterogenous in terms of applications and functions.
have a good and safe weekend
From Bloomberg
Don’t celebrate yet Bad news for chipmakers is generally good news for customers: In their earnings reports this season, Intel Corp., Nvidia Corp. and Micron Technology Inc. gave forecasts that indicate chip supply is outrunning demand. The implication—that a supply glut could be looming—is potentially dire for the companies.
But finally, it seemed, customers who had been struggling to get enough silicon, and not pay dearly for it, would get some relief.
Unfortunately for both customers and chipmakers, the reality is more complicated. The chip companies that are struggling with the buildup of unused stockpiles and falling orders are primarily concentrated in one area: the PC industry. In the pandemic, the rise in remote work sent demand for personal computers skyward. Now, people are returning to offices and schools, and deciding they don’t need that fourth home laptop.
Meanwhile, the customers that aren’t looking to buy PC chips are still struggling. Cisco Systems Inc., the maker of machinery that basically runs the internet, said it still can’t get enough components to meet demand. Like many others, Cisco is suffering shortages of a lot of types of chips, including ones that may perform relatively simple functions but are nonetheless essential to complex devices such as network switches or routers.
Older types of chips, like power convertors, are made in factories that have long since ceased to be state of the art. Because of the industry’s fascination with producing chips using hyper-advanced technology in facilities that cost as much as $20 billion, there’s been very little investment in expanding capacity of older, less complex manufacturing.
Cisco forecast that the issues will persist through its fiscal 2023, which ends in July next year. Scott Herren, Cisco’s chief financial officer, said his hope is that factory space freed up by less production of PC parts will be devoted to making more of what he needs, but that will take time to play out.
Chip stocks have taken a dive recently on supply glut fears. But it’s worth nothing that not everyone is hurting. Analog Devices Inc., a maker of chips used in vehicles and industrial machinery, said its backlog of orders is still growing. Prices for its products are stable, it said. This is from a company whose worst quarter this year featured 72% revenue growth.
Other companies, like NXP Semiconductors NV and STMicroelectronics NV, are seeing strong demand as well. Their results suggest the chip industry is no longer as reliant on PC and smartphone growth to stay healthy. Semiconductors are used in so many products these days—cars, factory equipment, appliances—that chipmakers have an extra cushion.
Still, that’s not placating investors who react to the slightest mention of a slowdown. Even after Analog Devices gave a better-than-expected forecast—saying it was conservative, at that—the stock fell 5% on Wednesday.
A chip glut may well be coming, but for much of the industry it's not here yet. Applied Materials, the biggest maker of machines that manufacture chips, said Thursday that it’s still receiving more orders than it can fill—because it can’t get enough chips itself. That situation is going to persist for several more quarters, Chief Executive Officer Gary Dickerson told us.
This raises the question, if the maker of chipmaking equipment can’t get enough chips, what chance do others have? —Ian King
What do factory shutdowns in China, shipping delays in Europe and reduced agricultural output in the U.S. have to do with each other? They are all being caused by severe droughts impacting the world's largest economies. Researchers say the dry spells are partly because of seasonal weather patterns like La Niña, but are also related to consequences of land degradation and climate change.
Snapshot: The Chinese province of Sichuan just announced it would extend industrial power cuts and activate its highest emergency response, impacting a number of global manufacturers like Apple (AAPL), Foxconn (OTCPK:FXCOF), Toyota (TM) and Volkswagen (OTCPK:VWAGY). The vital Yangtze, the longest river in Asia, reached its lowest level on record for August, affecting supply of hydropower and causing widespread shortages. Tesla (TSLA) has even asked the government to help ensure its suppliers have a sufficient amount of electricity, with over a dozen of them currently not able to manufacture at full capacity.
Over in Europe, cargo ships have had to reduce their loads due to critically low levels of the Rhine. The waterway is usually occupied with vessels transporting raw materials to power plants and factories, and Italy has even declared a state of emergency along its important Po River. Separately, agricultural forecasters in the U.S. now expect farmers to lose more than 40% of the cotton crop, while many acres of farmland are being left unplanted because of water shortages. In fact, the U.S. Bureau of Reclamation has announced that states like Arizona and Nevada will have to cut their water allocations by up to 21% next year because of the increasing megadrought in the Southwest.
Go deeper: The situation could drive up energy prices as hydro and nuclear power are reduced given the lower levels of water (that cannot sufficiently cool reactors). Higher transport costs and supply chain snarls could also raise food prices, adding to inflationary forces and squeezing a global trade system that was already under pressure from the coronavirus pandemic.
Mabel Top 2 Strikers, Dnex Lionel Messi and Sapnrg Thomas Muller is on attacking mode this morning. Both of them are standing hot on the podium. Serba Cristiano Ronaldo is still sleeping...
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Trevor777
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Posted by Trevor777 > 2022-08-19 10:19 | Report Abuse
So very quiet......like a Graveyard...cemetery.......only living dead walking about.......eerrrrieeee.........