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Memory chip crisis threatens to wipe out earnings, destabilise suppliers

It's been a swift descent from the industry's pandemic sales surge, which was fueled by shoppers outfitting home offices and snapping up computers, tablets and smartphones

memory chip, memory chip market, chip market
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Photo: Bloomberg

Sohee Kim, Ian King & Lin Zhu | Bloomberg
This time was supposed to be different.
 
The memory-chip sector, famous for its boom-and-bust cycles, had changed its ways. A combination of more disciplined management and new markets for its products — including 5G technology and cloud services — would ensure that companies delivered more predictable earnings.

And yet, less than a year after memory companies made such pronouncements, the $160 billion industry is suffering one of its worst routs ever. There’s a glut of the chips sitting in warehouses, customers are cutting orders, and product prices have plunged.

“The chip industry thought that suppliers were going to have better control,” said

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First Published: Jan 30 2023 | 6:52 AM IST

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