Wary shoppers muddy outlook for tech, auto firms in Asia



* Samsung says chip demand for phones, PCs to weaken further

* Server clients may adjust inventory if recession occurs -Samsung

* Toyota misses April-June output target

* GM China operations lost $100 mln in Q2 due to curbs

By Joyce Lee and Satoshi Sugiyama

July 28 (Reuters) - Asian tech firms from chipmaker Samsung to display panel maker LG Display warned of a sharp slowdown in demand for smartphones, TVs and gadgets as surging inflation and deepening concerns of a recession crimp consumer spending.

Comments from top company executives in Asia, often called the world's factory, echo warnings from U.S. and European firms who say shoppers with lower incomes are skipping discretionary items and sticking to cheaper basics when buying everyday necessities amid global uncertainty, the crisis in Ukraine and the impact of China's COVID lockdowns.

"As a downturn looms, consumption is expected to generally slow down except for essential goods," LG Display Co Ltd 034220.KS , a supplier of display panels to Apple AAPL.O and TV makers, said on Wednesday.

"Set makers and retailers in general are becoming more conservative in their business operations."

Samsung Electronics Co Ltd 005930.KS , the world's top maker of memory chips and smartphones, said on Thursday that "PC and mobile demand is likely to see continued weakness."

While demand from server or data centre customers is less affected by macroeconomic issues, server clients would also have to adjust their inventory if a recession occurs, the South Korean firm cautioned.

Data centre customers, backed by tech heavyweights including Microsoft Corp MSFT.O and Alphabet Inc GOOGL.O that reported strong quarters, have been a bright spot so far for chipmakers.

But Samsung's smaller rival SK Hynix Inc 000660.KS on Wednesday warned of slowing spending from both smartphone customers and data centre customers.

"Recently, consumer sentiment has been rapidly shrinking due to deepening concerns over inflation and economic recession, and companies are now noticeably moving to cut costs," it said.

In recent weeks, U.S. chipmakers including Micron MU.O and AMD AMD.O have signaled waning demand as well after a two-year long semiconductor shortage that crimped production of consumer electronics and cars.

Taiwan's TSMC 2330.TW has also signalled that demand was cooling from consumer electronics customers as they use their own chip stockpiles.

Panasonic Holdings Corp 6752.T posted a 39% plunge in June quarter profit and said the risk of an economic slowdown caused by geopolitical risks and inflation globally remains high.

The Japanese conglomerate said profits at its energy unit that supplies EV batteries to Tesla Inc TSLA.O fell mainly due to higher costs for raw materials and logistics.

CHINA PRESSURES

U.S. chipmaker Qualcomm Inc QCOM.O , a foundry customer of Samsung's, said: "We expect the elevated uncertainty in the global economy and the impact of COVID measures in China will cause customers to act with caution in managing their purchases in the second half."

Smartphone sales in China, the biggest market in the world, fell 14.2% in April-June while volumes hit a decade low, Counterpoint Research said on Wednesday.

While analysts expect stronger demand for iPhones than for other smartphones, Apple AAPL.O announced discounts in China this week, a move it occasionally makes when sales are slow.

Tech and auto firms with factories in China have faced business disruptions in the world's second-largest economy due to COVID-19 lockdowns even as the war in Ukraine has pushed up energy and logistics costs.

The curbs have taken a huge toll on China's economy, with its gross domestic product in the April-June quarter growing at the slowest pace in some three decades barring a contraction in the first quarter of 2020.

Earlier this month, China's automobile industry association cut its sales forecast for the year as COVID measures weighed on demand, which authorities are now trying to revive with incentives such as lower purchase tax for some cars.

Toyota Motor Corp 7203.T , the world's largest automaker by sales, has seen its output hit in recent months by the chips shortage and supply constraints in China, producing 9.8% fewer cars over April-June than it initially planned.

General Motors Co GM.N , which reported a 40% slump in second-quarter profit, said its China operations lost $100 million in the period due to the curbs.

A bellwether for global automaking, GM said it was curbing spending ahead of a potential economic slowdown, as did its crosstown rival Ford Motor Co F.N .

Hyundai Motor Co 005380.KS , which like Uniqlo parent Fast Retailing 9983.T has seen the value of its profits lifted by a strong dollar, cautioned that rising inflation was posing some risks to demand in the second half.

For electric vehicles, however, some analysts say it would take another year for sales to slow, a view backed by Tesla Inc TSLA.O battery supplier LG Energy Solution Ltd 373220.KS .

LG Energy Solution said it expected solid demand in the second half of this year.

But Tesla boss Elon Musk has previously spoken of "a super bad feeling" about the economy.
Reporting by Joyce Lee and Heekyong Yang in Seoul; Writing by Sayantani Ghosh; Editing by Himani Sarkar

Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.

Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.

Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.

Gumagamit kami ng cookies para mabigyan ka ng mahusay na karanasan sa aming website. Magbasa pa o palitan ang iyong cookie settings.

Babala sa Risk: Maaaring malugi ang iyong kapital. Maaaring hindi nababagay sa lahat ang mga produktong naka-leverage. Mangyaring isaalang-alang ang aming Pahayag sa Risk.