Micron Technology’s forecast on Thursday, which predicts much worse-than-expected sales for the current quarter, sent chip stocks around the world plunging on Friday. Besides Micron, several other chip manufacturers have pointed to a possible decline in demand for chip products.<\/p>\n
The expected decline in demand for chip products is driven by several factors, in particular, fervent inflation, which is forcing companies to cut spending.<\/p>\n
Shares of Taiwan’s TSMC and MediaTek, Dutch chip gear maker ASML, Franco-Italian company STMicroelectronics and Germany’s Infineon all fell on Friday.<\/p>\n
In addition to soaring global inflation across the world causing consumers to tighten spending, China COVID-19 lockdown is also having an impact on demand, leading to a decline in sales of smartphones and personal computers.<\/p>\n
Despite the bleak outlook, Micron executives said they were confident about what demand for their chips would be in the long run. Industry analysts also claimed there was still a lot of demand for chips used in electric vehicles, 5G and high-speed computing.<\/p>\n
The COVID-19 pandemic forced many people to work from home, leading to an increase in demand for technology products. However, semiconductors, which are a core component of every technology product, were limited in supply and could not keep up with demand.<\/p>\n