The semiconductor industry is well accustomed to downdrafts. Downdrafts in the middle of a geopolitical storm are a whole other matter.
The third-quarter earnings season for the chip industry is shaping up to be a harsh one. A sharp downturn in sales of personal computers and smartphones continues to plague the sector, while worries have grown about the markets for chips used in data centers, cars and other applications. Chip makers Samsung and Advanced Micro Devices already preannounced disappointing results for the quarter late last week. On top of that all, the U.S. government is cracking down even harder on semiconductor technology sold to Chinese companies, with new rules announced Friday that expand on previous export controls.