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Chipmakers’ Pandemic Boom Turns to Bust as Recession Looms

  • Industry bracing for what could be worst downturn in decades
  • Age-old woe: ‘Everybody is really bad at forecasting demand’
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Even in an industry famous for its roller-coaster cycles, chipmakers are bracing for a particularly severe shift in coming months, when a record-setting sales surge is threatening to give way to the worst decline in a decade or more.

The semiconductor market enjoyed a massive run-up in orders during the pandemic, sending sales and stock prices to new highs and triggering a global scramble to find enough supplies. There was hope in some circles that the boom could be sustained for several more years without a painful pullback, but chipmakers are now facing a familiar problem: growing inventory and shrinking demand.