JW Insights: Semiconductor price falls rapidly as the electronic devices mar...

By Greg Gao

The prices of most types of chips fall fast, especially those that had been speculated with inflated prices plummeting by 90%, as the sales of the devices ease after a pandemic-fuelled boom, JW Insights reported.

Whenthe chip shortage swept across the globe last year, LED chip prices were the first to rise in China. Then the share prices of related Chinese public companies also skyrocketed. The stock price of Chinese LED driver IC provider Superchip (富满微) rose from RMB25 ($3.68) per share in March last year to nearly RMB180 ($26.5) per share. Bright Power Semiconductor(晶丰明源), a LED Lighting Driver IC IDM in China, has also soared from RMB160 ($23.5) per share to nearly RMB600 ($88.29) per share.

CCTV Business Channelreported that a STMicroelectronicschip had been one of the most in-demand chip products in 2021in China. Its price once rose to RMB3,500 ($515), and in 2022 the price droppedto near RMB600 ($88), a slump of more than 80%.

In addition, the price of another chip stayed at around RMB200 ($29.4) in 2021. The current price is only about RMB20 ($2.94) each, which is only one-tenth of the highest price, CCTV added.

In 2021, the world was in the grips of a global chip shortage and subsequent price skyrocketing largely because of demand for semiconductors surging far beyond supply capacity and have been aggravated by malicious speculation, a JW Insights analyst noted.

However, by 2022, the consumer electronics market stagnates as the pandemic-induced boom gradually eases. The shipment of smartphones, tablets, personal computers, and wearable devices are in decline, leading to an oversupply of semiconductors in the market. Chip prices are expected to fall further in the future, especially for products with a large inventory.

A recent Bloomberg report said the global chip shortage remains mostly with two types - power management chip and MCU.