Qualcomm released its financial report for the first quarter of fiscal year 2023 (as of the end of December last year), achieving revenue of US$9.456 billion, a year-on-year decrease of 12%; non-GAAP net profit was US$2.684 billion, a year-on-year decrease of 27%.

Qualcomm said demand for handsets remains weak and conditions are deteriorating in the enterprise and industrial sectors. But demand for automotive chips remains strong, the company said. Qualcomm expects revenue in the second quarter of fiscal 2023 (as of the end of March this year) to be approximately US$8.7 billion to US$9.5 billion, flat or down 8% from the previous quarter, and down 11% to 19% year-on-year. The outlook was lower than the $9.581 billion level expected by the market. Qualcomm believes that sluggish demand for mobile phones and inventory adjustments are the main reasons for dragging down operating performance, and it is expected that the inventory adjustment period may continue into the first half of this year.

Qualcomm's competitor, MediaTek, also performed poorly. Both revenue and net profit fell sharply month-on-month and year-on-year. Specifically, MediaTek’s revenue in the fourth quarter of 2022 was NT$108.194 billion (approximately RMB 24.43 billion), a decrease of 23.9% from the third quarter of 2022 and a decrease of 15.9% from the same period in 2021, a two-year low. Gross profit margin was 48.3%, a decrease of 1 percentage point from the third quarter of 2022, and a decrease of 1.3 percentage points from the same period in 2021. After-tax net profit was NT$18.514 billion (about 4.18 billion yuan), a decrease of A decrease of 40.4%, a decrease of 38.6% compared with the same period in 2021

MediaTek said that in Q4 last year, revenue dropped significantly in response to mobile phone customers entering the stage of inventory depletion. As the revenue scale converged, both gross profit margin and profitability also declined, hitting new lows in the fifth and eighth quarters respectively, affecting overall profit shrinking. It was the giant Intel that detonated the first thunder in the chip industry.

After the U.S. stock market closed on January 26, Beijing time, Intel announced its fourth-quarter and full-year results for 2022. The chip giant’s fourth-quarter performance failed to meet market expectations, falling sharply by 32%, setting the lowest quarterly revenue since 2016.

In the past, the PC business accounted for more than 50% of Intel's overall revenue and became a decisive factor in its financial report. From the perspective of the entire PC market, there was a serious decline in the fourth quarter of last year. According to IDC data, 2022Q4 global PC (including desktops, laptops and workstations) shipments were 67.2 million units, a year-on-year -27.5% and a month-on-month -9.5%. Intel said that in order to get back on track, the company needs computer makers to quickly clear inventories and reorder parts.

It is reported that the largest markets of Intel and Qualcomm are in mainland China. In 2022, Intel's revenue in mainland China will be US$17.125 billion (approximately RMB 116.6 billion), accounting for 27%. In fiscal year 2022, Qualcomm's revenue in mainland China was US$28.119 billion, accounting for 64%.

Similarly, according to AMD’s financial report for the fourth quarter and full year of fiscal year 2022, its revenue in the fourth quarter of 2022 will be US$5.6 billion, an increase of 16% compared with the same period last year, and its gross profit margin will be 43%. But its operating loss reached $149 million, and its net profit was only $21 million, down 98% compared to the same period last year.

For the operating loss in the fourth quarter, AMD explained that it was mainly due to the amortization of intangible assets related to the acquisition of Xilinx, and the reason for the decline in non-GAAP operating profit margin was mainly due to the decline in client business operating income.

In the memory chip market, the situation is even more severe. Samsung’s financial report released on January 31 showed that in the fourth quarter of 2022, Samsung’s operating profit fell by 69% year-on-year, from 13.86 trillion won to 4.3 trillion won, the lowest point in eight years; the annual operating profit was 433,800 yuan. billion won, a year-on-year decrease of 16%. Samsung said that the decline in performance was mainly due to the sharp drop in memory chip prices, coupled with weak sales of smartphones.

Hynix, the world's second largest memory chip maker, will have an operating loss of 1.7 trillion won (about 1.4 billion U.S. dollars) in the fourth quarter of 2022, compared with a profit of 4.2 trillion won in the same period last year. It is the company's first quarterly loss since the third quarter of 2012. loss. At the same time, companies such as Micron, Samsung, and Hynix have announced plans to reduce production and cut expenses.

Memory chips can be roughly divided into two directions: DRAM chips (memory) and NAND Flash (flash memory). According to China Business News, the price of NAND dropped by at least 30% last year, and the price drop of DRAM was even more violent.

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