Despite an easing in the shortages of chips that have bedevilled the industry over the past two years, Micron has warned that, following worse than expected revenues for the current quarter, demand had weakened considerably, and it had happened in, “a very short period of time."
Shares in many leading companies, both in the US and around the world, have taken a battering as a result. Confidence was dented last month when AMD warned of a slowdown in PC sales and analysts have suggested that it may take up to two quarters for a surfeit of stock to be used up.
Industry-wide shipments of smartphones to China – which is the world's biggest smartphone market - are expected to shrink by 18% this year, according to Gartner, while worldwide shipments are expected to drop 7% due to ongoing supply-chain issues.
According to reports TSMC, the world's largest contract chipmaker, has seen major clients cut chip orders for the rest of 2022, while Samsung has already made moves to address an inventory glut, asking suppliers to delay or cut shipments of components for several weeks.
While a shock to some companies, and many believe that the supply of chips will rebalance in the second half of the year, the rebalancing that is currently occurring has certainly been sharper than many expected.
