There are many types of analog chips, and their market growth has remained stable. When the market went down last year and most companies encountered difficulties, analog chip manufacturers also saw a significant increase in revenue. From a financial point of view, the revenue of TI, a well-known analog chip company, will exceed 20 billion US dollars for the first time in 2022; the second-ranked ADI has also set a record for 7 consecutive quarters, which fully demonstrates the vulnerability of analog chips to the market down cycle. toughness
However, in recent times, major analog chip manufacturers have expressed pessimism about the future
In 2023, TI will announce its first quarter results. As of March 31, TI's revenue and net profit have both declined significantly. Revenue in the first quarter was US$4.379 billion, down 6% quarter-on-quarter and 11% year-on-year, the largest drop in the past ten quarters. TI's analog chip revenue fell 14% in the first quarter, and profits fell 27% to $1.574 billion
Faced with the decline in performance in the first quarter, TI CEO Haviv Ilan issued a pessimistic forecast: "In addition to automobiles, all end markets have experienced weak demand"
For the pessimism about the future to be transmitted to the market, TI has recently released news of price cuts. According to media reports, TI's PMIC in Taiwan, China, has significantly reduced the price by 20%-30%. A related person in the industry said: "It is no exaggeration to say that TI's price reduction directly reduces the analog chip market from Hard to Hell."
Let’s look at another analog chip giant ADI. Due to the difference in the calculation time of the financial report, ADI recently released its second quarter financial report. Unlike TI's decline, ADI's revenue in the second quarter increased by 10% to $3.26 billion. It is not difficult to understand that in the income structure of ADI, the industrial market accounted for 52%, the automotive market accounted for 22%, the communication accounted for 15%, and the consumption accounted for 11%. Among them, both industry and automobile had a year-on-year growth of more than 26%. Rate. However, for the third quarter, ADI also expressed a pessimistic forecast
Analog Devices CEO Vincent Roche said, "Looking ahead to the second half of the year, revenue is expected to slow due to continued economic uncertainty and supply chain normalization"
In addition, companies such as NXP and Kewo also experienced negative year-on-year revenue growth in the first quarter of 2023. NXP's automotive business accounts for a large proportion, so the decline is relatively low. Revenue in the first quarter fell by 0.5%, and it is predicted that revenue in the second quarter will decline by 3% year-on-year. Similarly, NXP CEO Kurt Sievers said: "NXP is cautiously optimistic about successfully weathering the cyclical downturn in the consumer business"
pessimistic reasons
Inventory is one reason analog vendors are pessimistic about the future
TI said that many enterprise customers have a serious inventory backlog and are currently consuming excess inventory. TI inventory increased by US$531 million to US$3.3 billion from the previous month, and the inventory turnover days were 195 days, an increase of 38 days from the previous month, mainly for long-term growth.
ADI has always had a certain backlog of orders before. At present, ADI's inventory turnover days have increased to 155 days. At the relevant performance meeting, company executives said that they are increasing internal production and cooperating with partners to increase supply, and at the same time working hard to solve the problem by cooperating with customers. Currently, approximately 50% of the product portfolio can be shipped within 13 weeks. Prices have dropped significantly due to higher inventory in general logistics. However, it has been reported that ADI has raised product prices in May, and the specific increase has not been determined, so customers have a vague attitude towards ADI's current excess inventory.
NXP's channel inventory days in the first quarter were 1.6 months, the same as in the fourth quarter of 2022, slightly higher than the 1.5 months in the first quarter of 2022. Obviously, the current downturn in the consumer electronics market has affected NXP's destocking
Overall, the destocking of downstream industrial customers of analog devices is still bottoming out, and the decline in the price of general-purpose analog and car-spec analog parts is slowing down. In addition to the high inventory of industrial and car-spec chips, the inventory of consumer-grade analog chips is already normal
On the other hand, the overall situation in the market is not very good. Consumer electronics continues to weaken. From the perspective of mobile phones, in the first quarter of 2023, the global smartphone market will drop by 14% year-on-year and 7% quarter-on-quarter, with shipments reaching 280.2 million units
PCs continued to decline. In the first quarter, total shipments of desktop and notebook computers fell 33% year-on-year to 53.98 million units, the fourth consecutive quarter of double-digit annual decline
Revenues from TI's personal electronics division and data center server division fell 30% in the first quarter from the fourth quarter. Texas Instruments stated that the automotive market, whose demand has gradually increased in recent years, is the most active business of Texas Instruments, and the revenue of the automotive business in this quarter increased by about 4%-6%.
On a quarterly basis, demand for cars has also started to slip, although many cite cars as the only market dawn. According to the industry's observations, automotive chip design manufacturers increased their orders in the second quarter, with a quarter-on-quarter decrease of about 10%-20%. Among them, the adjusted products include PMICs and driver ICs.
According to the survey and forecast of Sigma Consulting, the price of automotive PMICs has begun to stabilize from the fourth quarter of 2022 and will continue until the first quarter of 2023. It is expected that the market price of automotive PMICs will start to decline after the second quarter of 2023. The comprehensive decline is about 7%-10%.
