Semiconductor Companies Now Face an Oversupply. What Happened? | WSJ Tech News Briefing

After two years of a chip shortage, we are now finding ourselves in a chip glut. What does a deepening oversupply of semiconductors mean for the industry?

WSJ semiconductors reporter Asa Fitch joins host Julie Chang to explain what led to this point and how the industry is looking ahead.

Photo: Kobi Wolf/Bloomberg News

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#Semiconductor #ChipShortage #WSJ

[Dxeus]

And car dealership are still using chip shortage as an excuse to charge 2X the market price.

[MathGPT]

I wish you guys did more with the visuals in these conversations, like cnbc with charts and relevant data

[Hassanmohamed]

Asianometry called this, semiconductor has huge cycles. It happens but a development slow down is also an issue.

[conduit]

Automakers have been using the supposed chip shortage as an excuse for months

[dennistai]

Three weeks ago in this channel the shortage is still happening, this week is already oversupply

[bozhidarpetrov]

In my humble opinion, the major driver for the economic cycle in the semiconductor industry is the low marginal cost. Once the fabs are upgraded and running, the price for producing one more unit is low. So it is not economically reasonable for chip factories to not operate at 100%. In other words, the average price for unit produced would be much larger if fabs produced just enough units to meet the demand. This is why they produce as much as possible. This creates oversupply. The macroeconomic factors (inflation, interest rates) has impact on the business cycle but I think they apply to all industries, not specifically to semi.

[msimon]

An oversupply is quite common at the end of every semiconductor business cycle. For at least 50+ years. An era of new designs starts because chips are cheap and available. An oversupply of the LPC1115 hasn't shown up yet. One of my favorites.

[possibledamage]

Does this mean that PS5’s will start being readily available soon?

[glennalexon]

Is nobody going to talk about how the WSJ often interviews the WSJ itself for these pieces?

[BookofProverbs]

Bro like a month ago I couldn’t stop reading about the shortage 🤦‍♂️

[Jocky]

Aren't they forced to abandon the China market?
And China consumes significant part of the sales?

[randielurbay]

Finally a diff HOST!!! Awesome Much Better

[dachanist]

No sources from WSJ yet products are still backordered worldwide

[KazMaw]

There is only an oversupply on particular chips. There's still a shortage for a lot of industries like cars, energy market etc

[Crunch_dGH]

Re: Semi Supply Disintermediation.
Asianometry is the clear authority in the chip journalism space. That said, Tesla remains best placed, due to their vertical integration of software among all chip managed components, allowing them freedom to “mix & match” chipsets where other makers’ reliance on non-communicating third parties prevents things like OTAUs that require seamless systems integration. Witness chargers based on VW’s kludged penitence network or Porsche’s year (if ever) delay of its Macan EV, etc. EV disruption is much more than skin (or marketing) deep.

[djayjp]

I understand it's in an interview format, but it is lacking in hard facts/stats that would really help to quantify and ground the discussion.

[bigboss]

The reason why we have an oversupply: the crypto market crashed and no one is mining cryptos 😅

[davidwelty]

After a shortage there is always a surplus. Economics 101.

[icns]

This was very good intel. Glad I listened to it all the way through! Thank you.

[videomakville]

Watch how the same companies which used the shortages as an excuse for price hikes find a way to keep the hiked prices despite a surplus.