Earlier this month, leading computer chip makers Samsung Electronics and Advanced Micro Devices (AMD) reported earnings that fell far short of expectations, which many analysts interpreted as a sign that a lasting economic rebound is further away than previously thought, Bloomberg reported.

Samsung, the world’s largest maker of memory chips, posted a 32-percent decrease in operating income. AMD’s number will come in about $1 billion short of its earlier estimate, the company said. 

Micron Technologies and Kioxia Holdings are cutting spending and production to stabilize plunging chip prices. The Taiwan Semiconductor Manufacturing Company has lopped 10 percent from its capital expenditure budget.

Share prices fell not only for AMD and Samsung, but also for makers Nvidia and Intel. ASML Holding, Advantest, and Screen Holdings, which supply chip-making equipment, saw their stock prices sink. Disco Corp, which puts finishing touches on chips, lost more of its market capitalization on 7 October than in the previous two years. 

“It seems end demand [for chips] has likely deteriorated markedly in recent weeks, and end customers appear to be aggressively draining inventory,” analyst Stacy Rasgon at Bernstein Private Wealth Management told Bloomberg. 

AMD’s loss of revenue “is admittedly a bit breathtaking,” she added.

Consumers spent lavishly on all things electronic during the COVID War but now demand has dropped sharply, especially as interest rates and prices for consumer goods continue rising.

Also, the electronics industry has been crimped by U.S. restrictions on exports of advanced technology to China.

“If AMD and Nvidia can’t sell their chips in China, memory makers’ earnings will deteriorate further,” Heo Pil-Seok, CEO of Midas International Asset Management in South Korea said to Bloomberg.

“We would continue to stay away from PC-centric names, which include AMD, Intel, and Nvidia, due to a likely prolonged PC downturn into next year and continued weakness in consumer gaming,” analysts at Robert W. Baird & Co. wrote in a note to clients earlier this month.

Personal computers are steadily losing ground to tablets and smartphones, leaving some chip makers that have focused on PCs scurrying to catch up with changes in the market.

The market for memory chips will be soft through 2023, Kyung Kyehyun, chief of Samsung’s chip business, said last month at an employee event. 

The company now has cut its April forecast for chip sales in the second half of this year by 32 percent, he noted.

TREND FORECAST: When the COVID War began in January 2020, the companies that profited the most were hi-tech. Indeed, they were the first to tell their employees to work remotely, which meant more need for more high-tech. And with schools closed and children learning remotely—and locked up and forbidden to go out and play—they heavily emerged into the Metaverse world of hi-tech interaction, games and entertainment… all of which heavily boosted the bottom line of the tech world.

Those days have ended and so have the high sales for high tech.