WOLF - Ahead of Q1 earnings cracks are starting to show in the chip market

Semiconductor companies have had a strong couple of years, as demand for electronics surged during the pandemic and supply chains were interrupted by the virus, keeping inventories tight, demand high and prices even higher. But as the calendar gets deeper into 2022, some cracks in the industry are starting to show. Wells Fargo analyst Gary Mobley noted that the first-half of the year is a "game of supply chain whack-a-mole," citing worries over supplies of neon gas due to Russia's invasion of Ukraine; a shortage of the chemicals used to produce chips; and rolling lockdowns in China. However, there are also "pockets of demand weakness," Mobley added, citing weakness in both the consumer PC and smartphone markets. There's also concern that global light vehicle production is slowing, with research firm IHS cutting its forecast to 6% growth, down from 9% growth, but that is likely due to supply chain issues

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Ahead of Q1 earnings, cracks are starting to show in the chip market