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The demand for chips is weak, and IC prices are likely to resume the quarterly reduction mode next yea
Source:SPARKLAND ELECTRONICS CO.,LIMITED Time:2022-11-15
Under the weak terminal demand, all major brands have delayed pulling goods, and communicated with IC designers to reduce prices. The industry also made concessions. However, the industry frankly said that even though the price decline is still large, customers still do not pull goods. Therefore, the price is relatively supportive before the end of the year. The focus is still on when the inventory will be digested and when the demand will recover. After the inventory is digested and customers pull goods again, next year will have the opportunity to resume the quarterly decline mode.
The industry said that at this stage, no matter the number of orders from brand manufacturers and system manufacturers is small, the actual decline in IC prices will not be too large, and usually the upstream and downstream coordination. In addition to lower prices, the order quantity must be large enough to have bargaining chips. And customers have no intention to pull goods now, so the industry mostly steps on the price, only a small margin.
However, looking forward to next year, the industry believes that although the price will not quickly recover to the pre epidemic level in a short period of time, there may be greater bargaining space at that time as customers restart to pull goods in response to the Lunar New Year, and it does not rule out the restoration of the previous quarterly adjustment model.
As for the time schedule of inventory decontamination, the industry generally takes a conservative view, ranging from one to two quarters in the short term to nearly one year in the long term. It also points out that because of the overlapping supply chain, the upstream industry will return to the inventory level before the epidemic. The longer it takes, the earlier the downstream industry will leave the situation of high inventory level.
In addition, due to the fact that the wafer factory is also stepping on the bottom line of price at this stage, the IC design industry is also feeling the pressure of the decline of gross profit margin when the cost decline is not as fast as the price decline. Therefore, the industry is also redesigning chips, such as reducing the size of the bare crystal (Die), increasing the output of a single wafer, and optimizing the yield, hoping to mitigate the impact of the decline of gross profit margin.
The industry said that at this stage, no matter the number of orders from brand manufacturers and system manufacturers is small, the actual decline in IC prices will not be too large, and usually the upstream and downstream coordination. In addition to lower prices, the order quantity must be large enough to have bargaining chips. And customers have no intention to pull goods now, so the industry mostly steps on the price, only a small margin.
However, looking forward to next year, the industry believes that although the price will not quickly recover to the pre epidemic level in a short period of time, there may be greater bargaining space at that time as customers restart to pull goods in response to the Lunar New Year, and it does not rule out the restoration of the previous quarterly adjustment model.
As for the time schedule of inventory decontamination, the industry generally takes a conservative view, ranging from one to two quarters in the short term to nearly one year in the long term. It also points out that because of the overlapping supply chain, the upstream industry will return to the inventory level before the epidemic. The longer it takes, the earlier the downstream industry will leave the situation of high inventory level.
In addition, due to the fact that the wafer factory is also stepping on the bottom line of price at this stage, the IC design industry is also feeling the pressure of the decline of gross profit margin when the cost decline is not as fast as the price decline. Therefore, the industry is also redesigning chips, such as reducing the size of the bare crystal (Die), increasing the output of a single wafer, and optimizing the yield, hoping to mitigate the impact of the decline of gross profit margin.
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SPARKLAND ELECTRONICS CO.,LIMITED
SPARKLAND ELECTRONICS CO.,LIMITED
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Copyright:SPARKLAND ELECTRONICS CO.,LIMITED
Copyright:SPARKLAND ELECTRONICS CO.,LIMITED
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