Home > Latest News > Intel, WD Earnings Crash As Chip Demand Falls Further

Intel, WD Earnings Crash As Chip Demand Falls Further

Dangerously high inventory levels, waning PC and mobile demand, and strict sanctions with China have well and truly pushed the recent semiconductor boom towards bust.

Intel reported an 85 per cent year-on-year drop in net income for the September quarter, with a 20 per cent fall in revenue. This follows a 22 per cent fall in revenue the previous quarter.

CEO Pat Gelsinger didn’t mince words at the company’s earnings call.

“It’s just hard to see any points of good news on the horizon,” Gelsinger said.

He noted the company predicted an “abrupt and pronounced slowdown in demand” in June, which is now “beyond our initial expectations and is now having an industrywide impact across the electronic supply chain.”

Western Digital’s net income was down a whopping 96 per cent from the same quarter last year due to “incredibly dynamic and challenging macroeconomic environment,” according to David Goeckeler, Western Digital CEO.

Last week, Samsung Electronics posted record third quarter revenue, but weak demand for memory chips — of which the company is the number one producer in the world –saw profits drop 23 per cent year-on-year.

The company saw a 49 per cent drop in operating profit in its semiconductor segment.

TSMC is currently bucking the trend, posting an 80 per cent net profit jump for the September quarter, due almost solely to its 5-nanometer chips, which remain in demand.

However CEO CC Wei warned in an earnings call that “capacity utilisation will not be as high as it has been in the past three years.”

The crashing demand for chips “will likely see its biggest impact sometime in the first half of 2023,” he forecast.

Global chip sales fell by 4 per cent in August, according to World Semiconductor Trade Statistics, while according to Taiwan’s TrendForce, flash memory prices fell 13-18 per cent year-on-year for the September quarter, with DRAM memory dropping 10-15 per cent in the same period.



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