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on February 6th

The semiconductor industry still faces challenges, with three major chip manufacturers warning of weak demand in 2024

The semiconductor industry still faces challenges, with the three major chip manufacturers warning of weak demand in 2024, especially in the industrial and wireless technology sectors.


Due to a decrease in demand from industrial customers, Infineon, one of Europe's largest chip manufacturers, has lowered its sales guidelines. The company stated in a statement that it expects to face difficulties in the second quarter due to a "significant decline" in sales of power and sensor chips for industrial applications.

Infineon CEO Jochen Hanebeck said, "In the fields of consumption, communication, computing, and Internet of Things (IoT) applications, we expect a significant recovery in demand in the second half of the year."

Competitors STMicroelectronics and Texas Instruments have also seen a significant slowdown in industrial production, both of which provided disappointing forecasts in January of this year.

Norwegian Nordic Semiconductor's guidance for the first quarter of 2024 was lower than expected, with Morgan Stanley analysts warning that weakness will be "long-term". According to a statement, the company currently expects revenue for the first quarter to be between $70 million and $80 million, lower than the expected $114.5 million.

The company stated that "Bluetooth customers remain cautious and continue to consume inventory in the fourth quarter." Revenue in the fourth quarter of 2023 decreased by 43% to $108 million.

Renishaw Plc, which produces semiconductor equipment encoders, also sees continued weak demand in the industry, but expects some improvement in the second half of the year.

Despite the slowdown in demand for electric vehicles, the demand for automotive chips, which account for more than half of the revenue of STMicroelectronics and Infineon, will remain more resilient. Jochen Hanebeck stated that Infineon's expectations for the automotive market have "remained almost unchanged".

Bernstein analyst Sara Russo stated in an email that STMicroelectronics and Infineon are in a better position than Texas Instruments because they have strong business in the electric vehicle sector and are both expected to increase automotive revenue in 2024.

The analyst said, "But the direct impact of inventory adjustments is to suppress these stock prices, as we consider the pressure of declining profit margins and expected revenue growth in 2024."
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