A revival is under way in the chip business

TO SEE JUST how fast microchips are eating the world, look at the Consumer Electronics Show (CES), an annual gadget-fest held in Las Vegas. This year’s event includes everything from ultra-high-definition televisions, “smart” light bulbs and powered exoskeletons to concept cars that can drive sideways and house robots designed to deliver toilet paper. Every one of these must-have consumer trinkets is a computer in disguise, with innards made from microprocessors, memory chips and circuit boards.

Yet the industry upon which all this is built has been having a torrid time of late. Future Horizons, a chip-industry analysis firm, reckons that global semiconductor sales shrank by about 12% in 2019, to $410bn. Samsung Electronics, a South Korean company that is the world’s biggest maker of memory chips, reported a 56% fall in quarterly operating profits in October, dragged down by the poor performance of its chip division. Entire economies have been feeling the pain. Semiconductors account for a fifth of South Korea’s exports, which have fallen for 12 months in a row, partly owing to the sector’s weakness.

Now the slump seems to be ending. On January 8th Samsung predicted another fall in quarterly profits. But it was smaller than expected. The firm’s share price rose. The price of memory chips is up. Shares in SK hynix,...

via Business Feeds

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