Demand from the Chinese market declined, the largest memory chip giant in the US suffered a heavy loss, laying off 5,000 employees

It is estimated that in 2022, global smartphone sales will decrease by about 150 million units (equivalent to 10%) and personal computer sales by about 40 million units (equivalent to 13%).

In the Chinese market, the situation is even worse. Of those 150 million fewer mobile phones sold, the Chinese market probably accounts for half, and the same goes for personal computers.

This causes the “giants” to supply chips that depend on the Chinese market to seriously decline. Since China is the global manufacturing base of electronic products, it needs to import about 60% of the world’s chips, but once the demand for chips in the Chinese market declines, chip suppliers will certainly be affected. great benefit.

According to Chinese customs data, from January to November 2022, the country’s integrated circuit imports were 498.51 billion units; compared with 582.4 billion units in the same period last year, integrated circuit imports decreased by 84 billion units, equivalent to a decrease of 14.4%.

Therefore, this situation is immediately affecting the upstream chip manufacturers. For example, Micron – America’s largest memory chip maker – has struggled since the second quarter.

According to Micron’s fiscal fourth quarter (June-August) data, the company’s revenue fell about 20% year-over-year, the first decline in more than two years. profits fell by 45%.

Then, in October, US media reported that Micron would reduce production of DRAM and NAND memory chips by about 20% due to low market demand.

Recently, Micron released its first quarter financial report for fiscal year 2023 (September to November 2022). For the quarter, the company’s revenue was $4.09 billion, down 47 percent year-on-year and a net loss of $195 million, while its net profit for the same period last year was $2.306 billion.

Obviously, over the past six months, Micron’s business has been very bad, and the company is no longer optimistic about the near future for the next 3 months.

Micron said it expects to cut about 10 percent of its workforce by 2023 by letting workers voluntarily quit or be laid off. Micron currently employs nearly 50,000 people worldwide, and laying off 10% of its workforce means laying off 5,000 people.

According to news site Sohu, Micron is just one example of American chip giants. In fact, in the past year, chip giants such as AMD, Intel, and Nvidia have all performed poorly and their business has declined. And these manufacturers are monitoring the Chinese market daily, hoping that the Chinese market will quickly recover demand, helping them free up inventory and improve business performance.