(JW Insights) Feb 23 -- Poor financial performance of major global chip companies -SK Hynix, Samsung and KLA - shows the adverse impact that US chip export restrictions on China have had on the entire global semiconductor industry, pointed out a China Daily article on February 23.

As the US's relentless political interference continues to weigh on chip multinationals, China's economic recovery, including strong momentum in new energy vehicles, could offer some relief, experts said.

Toshiya Hari, lead analyst covering the semiconductor industry at investment bank Goldman Sachs, estimated that US controls on exports of high-end chipmaking equipment to China could have cost the world's toolmakers $6 billion in lost revenue in 2022, or 9 percent of their previously projected sales.

In the fourth quarter of 2022, the South Korean memory chip company SK Hynix posted a loss for the first time in 10 years, with net loss standing at 3.52 trillion won ($2.7 billion), according to the report.

SK Hynix said earlier that it would slash investment this year by more than 50 percent, and the US export controls could place many limitations on running its plant in Wuxi, eastern China's Jiangsu Province.

Meanwhile, Samsung chip segment's profit tumbled more than 90 percent year-on-year to 270 billion won ($210 million)in the last quarter of last year.

In addition, the US chip company KLA said earlier its systems and service revenue could be affected in the near term by US export regulations on the sale of semiconductor technology to China, said the China Daily report.

According to a forecast by the World Semiconductor Trade Statistics, the global semiconductor market is forecast to decline by 4.1 percent this year to $557 billion - the first annual contraction since 2019. The decline is attributable to a number of factors, including rising inflation and weak consumer markets that hurt chip sales.

Global smartphone shipments fell 12 percent in 2022 to fewer than 1.2 billion units, according to market research company Canalys.

Miao Wei, former minister of industry and information technology, said that as the global semiconductor industry is entering a downcycle, China's booming new energy vehicle market could offer a ray of hope for the world.

Now, the use of chips per new energy vehicle is 10 times that of per smartphone, and chip demand from the NEV market is far greater than that of the consumer electronics market, Miao said.

"It's expected that the rapid growth of China's new energy vehicles can make up for the negative impact of the decline in consumer electronics demand on the chip market, and will become an important support force for the global chip market in the future," Miao added, according to China Daily.

(Chen HX)