Demand for mobile phone chips shrinks

Although the smartphone market is still in full swing, Asian manufacturers’ smartphone chips have shrunk. Affected by this, in the past week, semiconductor companies such as Intel and Texas Instruments have all issued disappointing performance estimates. On Tuesday, a number of chip makers announced disappointing performance expectations, which led to a collective collapse in share prices. Among them, the well-known chip manufacturer Broadcom said that it has laid off more than 1,000 employees in the third quarter. Altera, RF Micro Devices and other companies are also joining the list.

On Tuesday, Broadcom’s share price dropped 8% in after-hours trading. Altera’s share price dropped as much as 6%, and RF Micro Devices dropped 5%.

Doug Freedman, an analyst at Royal Bank of Canada, said: "You can see this problem in the entire semiconductor ecosystem. With the exception of memory chips, other chips have no ideal income." Friedman The so-called memory chips are related to Micron Technology, Inc. and its fourth-quarter revenue exceeded Wall Street expectations.

Friedman said that the global economy is still weak, and manufacturers buyers have no reason to continue to increase chip inventory for smart phones, notebook computers, industrial equipment, and automotive electronics.

STMicroelectronics, the largest semiconductor manufacturer in Europe, stated that in the third quarter of this year, the demand for high-end smart phone chips from Asia appears weak, and related revenues in the fourth quarter of this year will likely remain unchanged.

Due to the low demand for mobile communications chips, Broadcom said that it reduced operating costs through restructuring in the third quarter and has already laid off 1,150 employees. Broadcom currently employs 12,050 people.

Since the beginning of this year, Broadcom’s stock price has fallen by 13%. Investors fear that the increasingly fierce competition in smart phone communications chips will affect Broadcom’s profits. In addition, Broadcom’s response to the launch of 4G chips is slow.

Broadcom will increase its restructuring and layoff costs by US$12 million and US$20 million respectively in the third and fourth quarters.

According to reports, Broadcom’s mobile phone communications chips are mainly based on 3G, but many mobile phone manufacturers have begun to migrate to 4G (LTE), an industry expert said that the competition of 3G chips can be called “hands-in-hand”, and manufacturers are greatly reducing prices. In exchange for market share.

Earlier this week, Texas Instruments and Intel Corp. announced fourth-quarter earnings expectations that disappointed investors.