Samsung doesn’t expect chip sales to improve over the next year.
The company had originally forecasted the second half of 2022 being stronger than the first, however following a drop in PC, smartphone, and data server sales, the world’s largest chip maker is experiencing a sudden fall in demand.
CEO Kyung Kye-hyun said in a briefing that the company will use the dry spell to focus on capturing more market share and expand investments in research and development.
“Bad times can become good opportunities,” Kyung says.
Samsung produces some of the most advanced, specialized chips, but holds a large share of the market for memory chips. Memory chips are used in everyday products like smartphones, cars, and refrigerators.
Why it’s news
A drop in demand for electronics has surprised some chip manufacturers who had previously enjoyed the high levels of demand when electronics were popular during the pandemic.
Previous projections had forecasted global chip sales to grow 16.3% this year. Now that estimate is at 13.9%, The Wall Street Journal reports.
The following year, chip sales are expected to grow by 4.6%, less than the previously forecasted 5.1% increase.
Demand isn’t the only issue manufacturers face. New U.S. licensing requirements are affecting major semiconductor producers like Nvidia and Advanced Micro Devices Inc. The new requirements place stricter regulations on specialized chips shipped to China and Russia.
Even if Samsung faces some uncertainty due to the market slowdown, it will likely receive major benefits from a recently passed semiconductor chip bill in the U.S.