2023-10-18 15:56:02
The chip industry continues to be characterized by great uncertainty. For months, political tensions between America and China have been putting pressure on the semiconductor industry in particular, as the USA is increasingly restricting the export of products to China.
The Dutch technology group ASML, which produces machines for chip production, is also feeling this. In addition, the Dutch customers are apparently still holding back on new orders, even if they expect the bottom to bottom at the end of the year, it was said on Tuesday when the quarterly figures were presented. Nevertheless, the Amsterdam-listed group warned of a transition year in 2024 and stagnating sales.
Despite strong quarterly results, the news was not well received on the stock market. The ASML share temporarily lost around 5 percent. With a market value of around 220 billion euros, it is the most valuable European technology group. Other values did not remain unaffected. The stock of the German chip company Infineon was still a good one percent in the red in the afternoon, as was its American competitor Intel. STMicroelectronics also lost in the meantime.
In recent months, chip companies, driven by high government subsidies, have announced the construction of one billion-dollar mega-factory after the next – including Intel, Infineon and Wolfspeed in Germany. However, they will only be built in the coming years and will not run at full capacity right away, but will only be gradually equipped with machines – in accordance with the expected order situation from the chip companies. After all, semiconductor production is extremely resource-intensive and therefore cost-intensive.
Not all chips are in demand
However, chip companies’ orders received have been very volatile in recent months, depending on the industry. Infineon serves industrial customers who install the chips in cars, renewable energy systems and data centers. These chips continue to be in high demand. However, things looked much worse for companies that primarily produce chips for consumer electronics, such as cell phones, computers and televisions.
Manufacturers like TSMC increased their production significantly during the pandemic in order to be able to meet the stark demand. After the end of Corona and with a deteriorating global economy, end consumers in many countries also held back, so that there was excess capacity for such chips on the market.
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The political tensions between the USA and China are seen as a further uncertainty factor for the entire industry. Taiwan, to which China has territorial claims, is home to the world’s largest chip manufacturers, TSMC and Globalwafers. America recently tightened export restrictions to China for semiconductor products again.
On Tuesday, the American processor manufacturer Nvidia also warned of the consequences. The new rules could hinder the company’s product development and create further difficulties, it was said. The Nvidia share temporarily lost almost 5 percent of its value, the highest loss in one day in around two months.
It will therefore be interesting to see how other manufacturers who will present their financial figures in the coming weeks assess the situation.
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