Home » China COVID Shutdowns Drive Semiconductor Market Losses

China COVID Shutdowns Drive Semiconductor Market Losses

Publicly-listed semiconductor companies discussed the negative impact of China’s COVID-19 lockdowns at recent analyst and investor conferences after the first quarter close.

Companies like Texas Instruments announced a 10% drop in their revenue forecast for the second quarter. This happened because several Chinese customers were unable to receive their orders, causing $500 million in losses. Thus, Texas Instruments will register 4,500 million instead of the 5,000 million estimated for Q2 2022.

Faced with this situation, the company’s financial director, Rafael Lizardi, explained that it was due to 2 reasons main:

  • Carriers unable to deliver components to factories located in China.
  • The closed factories that did not accept these deliveries.

Continuing the explanations, he explained that there was hundreds of factories closed at different levels, as COVID restrictions vary across the country. In some cases, factories were completely shut down, but in others they were operating at 20 or 50 percent of full capacity.

China Close 740x493 0

However, not everything is negative, since companies like the Japanese Renesas electronics claims that China’s blockade will not cause major casualties. According to its general manager, Hidetoshi Shibata, this situation will be overcome by his company, which suffered a stoppage in 3 of its factories on March 16, due to the earthquake in Japan. But as revealed, the factories are already operational produce more platelets to compensate for the disturbances caused by the earthquake.

Finally, we have the statement Qualcommwhere its chief financial officer Akash Palkhiwala referred to a “slight decrease» of the demand for components for telephones from low end. However, Akash is positive in his statements and believes that a chinese recovery for end of third trimester. According to him, China encompasses 20% of the global marketleaving the remaining 80% which will give rise to good news from an economic point of view, believing that there will be a strong demand for high-end devices in the future.

Via: TheRegister

About the author


Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *