Price war is coming! Samsung memory chip prices cut!

On July 5, according to industry insiders, Samsung is considering lowering the price of its memory chips in the second half of the year! If Samsung decides to lower prices, other memory chip companies will follow suit, and a price war may be triggered in the second half of this year!

Industry insiders pointed out that during this year's 618 shopping festival, the sales of SSDs and other storage devices were not ideal, which put pressure on downstream suppliers and component houses to accelerate inventory adjustments. As a result, chip suppliers' stance on prices has begun to loosen. In addition, sources pointed out that almost all types of memory prices will fall by more than 10% month-on-month in the third quarter of 2022. In the spot market, prices have been falling rapidly since the second quarter.

Since 2020, a sharp increase in demand and the impact of the COVID-19 pandemic on the supply chain have caused shortages in the global semiconductor industry, affecting the production of almost all downstream products, from home appliances to automobiles. However, as demand for electronic products cools, this trend is reversing. Micron Technology said it is taking quick action to avoid a chip surplus.

Consumers and businesses are reining in spending amid concerns about rising inflation and an impending recession. According to research firm Gartner, global PC shipments are expected to fall 9.5% in 2022, while global smartphone shipments are expected to drop 7.1% year-on-year.

“The second half of the year is off to a pretty bad start following pessimistic comments from Micron, which is negatively impacting overall demand for smartphones, data centers and consumer discretionary goods,” said Jim Dixon, senior equity sales trader at Mirabaud Securities. “Disappointing guidance could be a prelude to an ‘earnings recession.’”

Micron recently drastically lowered its fourth-quarter revenue guidance, predicting fourth-quarter sales of about $7.2 billion, far below analysts' estimates of $9.14 billion. This also means that Micron will see its first year-on-year revenue decline in more than two years. The weakness in the computer and smartphone markets is the main reason for the sluggish outlook.