Recently, according to titanium media reports, data show that China's chip industry is experiencing a significant round of adjustment, and the industry ushered in a cold winter. As of December 11, 2023, China has 10,900 chip-related enterprises cancelled and revoked, an increase of 69.8% over the same period last year, and an increase of 89.7% over 5,746 in 2022. At the same time, the number of newly registered chip companies reached 65,700 in the same period, an increase of 9.5% year-on-year, which indicates that the chip industry is experiencing a large-scale process of enterprise exit and the emergence of new companies.
Data show that the number of chip companies cancelled and revoked in 2023 is far more than in previous years, with an average of more than 31 chip companies cancelled and revoked industrial and commercial information every day. In the past five years, the number of domestic chip companies revoked and cancelled has exceeded 22,000, showing a clear downward trend. This may be due to the US dollar interest rate rise, the decline of the global consumer electronics market, industrial decoupling and other factors caused by industry adjustment.

The global semiconductor market is also affected, according to the latest forecast of World Semiconductor Trade Statistics (WSTS), in 2023, the global semiconductor market is expected to reach 520 billion US dollars, down 9.4%. This means that the global chip industry is still in a downward cycle, companies are facing important challenges, and the expected recovery may be slow.

In this context, some industry leading enterprises have also felt the pressure of the market.

Taiwan Semiconductor Manufacturing Company
Foundry leader TSMC's consolidated revenue in November fell 15.3 per cent quarter-on-quarter and 7.5 per cent year-on-year. From January to November 2023, TSMC's total revenue decreased by 4.1% year-on-year. TSMC President Wei Zhe Jia said that 2023 is in the inventory adjustment period, and 2024 is also uncertain, but due to the rapid development of AI applications, 2024 will still be full of opportunities.

ADI
According to an official notice filed with the California Department of Employment Development (EDD), Analog Devices (ADI) is planning a round of 111 layoffs at its Rio Robles office building in north SAN Jose, with an expected effective date of January 12, 2024.

The decision to cut jobs was based on ADI's latest fiscal fourth quarter report, which showed that the company's revenue fell 16% year-over-year to $2.72 billion as semiconductor inventories remained high. According to the report, only the automotive division showed positive revenue growth, up 14% year over year to $730 million, while the vehicle accounted for 27% of the overall revenue. The industrial segment, on the other hand, accounts for about 50% of ADI's revenue and is the largest source of revenue, but fourth-quarter revenue fell 20% year over year to $1.35 billion.

Be common

Gm plans to cut more than 1,300 jobs in Michigan, including 945 at its Orion plant and 369 at its Lansing Grand River plant, effective Jan. 1.

Broadcom
Bosch, the world's largest auto parts supplier, plans to cut jobs at two German plants by 2025, with a possible total of 1,500 jobs, as it ADAPTS to changing needs and technology in the automotive industry. The two plants are located in Feuerbach and Schwieberdingen, Germany.
On the other hand, the domestic market is also facing challenges. According to Eastern Wealth Choice data, as of November 1, 151 semiconductor listed companies disclosed three quarterly reports in 2023, with a total operating revenue of about 352.3 billion yuan, almost unchanged from the same period last year. However, the total net profit achieved by the parent was about 19.3 billion yuan, down about 54% year-on-year. Among them, the net profit of 111 semiconductor companies fell year-on-year, accounting for 74% of the overall number.

In addition, the secondary market is not optimistic. Taking chip design as an example, according to the data of Wei Shaojun, a professor at Tsinghua University and the director of the Integrated Circuit Design Branch of the China Semiconductor Industry Association, there are 3,243 chip design enterprises in China this year, of which 55% of the enterprises have sales revenue of less than 10 million yuan. This shows that although there are many domestic chip design enterprises, they are generally small in scale, and they are still in a "small and scattered" state on the whole.

Faced with the uncertainty of the external environment, China's chip industry needs to be more cautious and thoughtful in its future development. Although the industry as a whole is facing a certain winter, some industry insiders said that it is expected to usher in a recovery in 2024.

Research firm Gartner predicts that by 2024, the global semiconductor industry sales will grow by 16.8%, and the memory chip industry is expected to grow by 66.3%. According to Hu Weiwu, chairman of Longson Zhongke, it is expected that by 2027, the problem of "stuck neck" of China's chip industry chain should be basically solved. However, it is still necessary to pay close attention to factors such as the international trade environment, technological innovation and market demand to better cope with future changes.

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