Chip production in South Korea fell for the first time since 2018

In short: Over the past six months, South Korea’s semiconductor industry has run into excess inventory. This resulted in a year-on-year drop in production for the first time in four years as demand shrinks and inventories remain high. Once again, the blame is placed on the global economic downturn, especially the plummeting market for electronic goods.

According to bloombergSouth Korea’s semiconductor manufacturing fell 1.7% year-on-year in August, the first year-on-year decline since January 2018. month.

This is not the first sign that the sector is under pressure. The largest U.S. memory chip maker, Micron, yesterday forecast quarterly sales that were nearly $2 billion below Wall Street estimates, while Japanese NAND giant Kioxia said it was cutting production and cutting production by 30% in the coming months.

Samsung also warned that the second half of 2022 will be challenging. According to IC Insights, the DRAM market halved between May and July, and this trend will not change.

A recent TrendForce report predicts that NAND flash prices will fall 15% to 20% in the fourth quarter of the year. 3D NAND fell 30-35% in the third quarter, and analysts are predicting another 20-25% decline in the fourth quarter. But that’s good news for consumers looking to purchase products like SSDs that will see prices drop even further.

While the current global economic situation is a big part of the problem, much of what we are seeing now is a post-lockdown effect. At the beginning and in the midst of the pandemic, the demand for electronics skyrocketed as much of the world worked, studied and played at home. Companies were unable to keep up with consumers, which contributed to low availability and high prices at the time. But the end of the lockdown and declining demand have left many chip makers with surplus inventories.

In related news, gaming monitor shipments dropped for the first time and Apple cut production of the iPhone 14.

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