AMD Stock – Samsung’s Warning Is Causing Chip Stocks to Fall. What to Know.
South Korean technology giant
raised concerns over the global chip shortage on Wednesday, warning of a “serious imbalance” in supply and demand.
The world’s biggest smartphone and memory chip maker may also delay the launch of a new Galaxy Note smartphone due to the shortage, its co-chief executive Koh Dong-jin said at the company’s annual shareholders meeting. Koh also said the chip crunch posed a “slight problem” for the company in the second quarter, according to several reports.
“There’s a serious imbalance in supply and demand of chips in the IT sector globally,” Koh said. “It is hard to say the shortage issue has been solved 100%,” added the head of Samsung’s mobile unit.
The comments suggest that the global chip shortage, which has hit the automobile industry, may be spreading to the tech sector. Ford said on Tuesday that the semiconductor shortage could adversely impact its adjusted operating profit by $1 billion to $2.5 billion if it continues through the first half of 2021.
General Motors ,
which has been forced to cut production, issued a similar warning about the shortage. Volkswagen Chief Executive Herbert Diess said the company has been unable to build 100,000 cars due to the shortage.
Read:Chip Shortage Spells Trouble From Cars to Game Consoles
Samsung stock fell 0.6%, while shares of other chip makers were also under pressure on Wednesday.
Taiwan Semiconductor Manufacturing
slipped 2.1% and Huawei, Apple and Tesla supplier
declined 1.9%. U.S. chip maker
was 1.8% lower in premarket trading, while
Advanced Micro Devices
stock slipped 1.5% ahead of the open and
was 1.9% lower.
Looking ahead. The South Korean tech giant’s warning certainly highlights the extent of the global chip supply crunch, particularly as it appears serious enough for the company to consider delaying or even skipping the launch of a new Galaxy Note smartphone this year.
Such a delay could end up impacting European chip maker STMicroelectronics, analysts at Equita Sim said. “Samsung is one of STMicroelectronics’ top 10 customers and therefore postponing the Note product launch would have a negative effect on second quarter [results], volumes should then be recovered in the second half of the year,” they said.
Beyond just STMicro, the warning is significant for the entire industry and other sectors that rely on semiconductors.