Chip Results Augur More Tech Gloom As Slowing China Weighs | 4/25/2016 | Staff (Posted by) Level 3
BEIJING/SEOUL (Reuters) – Somber results from chipmakers SK Hynix Inc and Texas Instruments Inc , on the heels of warnings from tech behemoths Samsung and Apple, indicate more gloom for the sector as China’s economy slows to its weakest in decades.

A raft of earnings, analyst notes and market commentary in recent weeks have confirmed that a slowdown in the world’s No.2 economy, exacerbated by its crippling trade war with the United States, will continue to squeeze sales and profits at technology companies, at least in the first half of the year.

Woes - South - Korea - SK - Hynix

Chinese woes led to South Korea’s SK Hynix turning in its first quarterly profit decline in two years. The world’s No.2 memory chipmaker, which depends on China for more than a third of its revenue, also said it plans to spend 40 percent less on buying chip equipment this year.

Texas Instruments (TI), supplier of touchscreen controllers, power-management chips and a control device for Apple’s iPhones and iPads, reported a better-than-expected quarterly profit, but its revenue missed estimates.

Company - Demand - China - Regions - Smartphones

The Dallas-based company said demand in China was weaker than other regions, especially for smartphones, including demand from Chinese smartphone makers.

“We are seeing signs from our customers and the channel that this weakness is primarily from increased caution due to trade tensions,” Dave Pahl, head of TI’s investor relations, said.

Weakness - Combination - End-demand - Exports - Visibility

“We assume that this weakness is a combination of lower local end-demand as well as reduced exports, but we do not have the visibility to distinguish between the two.”

Market data indicates shipments in China, the world’s largest smartphone market, fell about 12 percent last year as consumers held on to their older devices.

Growth - Country - Growth - Years - Decades

Economic growth in the country, which has generated nearly a third of global growth in recent years, slowed to its weakest in nearly three decades in 2018 and is expected to ease further...
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