Weak demand for analog chips

In the field of semiconductors, analog chips have always been "stable performers". Due to the wide variety of analog chips, their market growth has always been in a stable state.

The time has entered 2023, and now TI has announced its first-quarter results. Faced with the decline in first-quarter performance, TI CEO Haviv Ilan issued a pessimistic forecast: "Except for automobiles, all end markets have experienced weak demand."

For the pessimism about the future to be transmitted to the market, TI has recently heard news of price cuts. Lansheng Technology said: "TI's price reduction directly reduces the difficulty of the analog chip market from Hard to Hell."

ADI recently released its second-quarter financial report. Unlike TI's decline, ADI's second-quarter revenue increased by 10% to $3.26 billion. However, for the third quarter, ADI also expressed a pessimistic forecast.

Analog Devices CEO Roach said, "Looking forward 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 revenue in the second quarter is forecast to decline by 3% year-on-year.

Inventory backlog is the root cause of weak demand for analog chips:

TI said that many enterprise customers have a serious inventory backlog and are currently depleting excess inventory. ADI has always had a certain backlog of orders. At present, ADI's inventory turnover days have increased to 155 days. NXP's channel inventory days in Q1 were 1.6 months, the same as in Q4 2022 and slightly higher than 1.5 months in Q1 2022.

Generally speaking, the inventory destocking of industrial customers downstream of analog devices is still bottoming out, and the decline in the price of general-purpose analog and vehicle-spec analog parts is slowing down. In addition to the high inventory of industrial and automotive specifications, the inventory of consumer-grade analog chips has already normal.

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