Intel and SanDisk have vastly different views on the current state of the storage chip industry
The Block
1h ago
Ai Focus
Intel cuts its earnings forecast for the quarter due to a shortage of memory chips, leading to a sharp drop in its stock price; SanDisk believes there is no shortage and expects the industry situation to improve significantly in the coming months. The two companies have vastly different views on the memory chip market, yet both have seen their stock prices decline.
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The earnings conference calls of two tech giants are both worth paying attention to, but they offered completely different assessments of the storage chip market situation. However, the outcomes for their stocks were identical: a significant drop in stock prices.

Due to Intel's warning regarding its quarterly performance, the stock suffered a heavy setback on Friday, with a decline of 28%. The core reason for this warning is that a shortage of memory chips has pushed up the prices of personal computers, which has led to consumer resistance.

Intel CEO Chen Liwu believes that due to the trends in the storage chip market, the business environment will be more challenging in the coming quarters.

"The customers have already signaled their concerns, and due to the impact of storage chip prices and supply conditions, the PC market has begun to weaken," said Chen Liwu. "Since the beginning of this year, the prices of complete terminal devices have risen significantly, putting further pressure on the already limited IT budgets. In the past two months, the pace of adjustment in the PC industry has accelerated, and original equipment manufacturers (OEMs) are working actively with partners to manage inventory in order to adapt to the weak sales situation in the terminal market."

He added, "We expect this market environment to continue until storage chip supply returns to normal levels and prices stabilize. Although the PC market will face challenges in the coming quarters, our product roadmap is continuously being improved, and the long-term outlook remains positive."

Looking at Sandisk's financial report conference call on Thursday evening, you will hear a completely different perspective: Sandisk believes that there is no shortage of storage chips at all; at least in the coming months, the industry situation is expected to improve significantly.

SanDisk CEO David Gokler stated: 'Our internal models cover all segments of the NAND flash memory market. PC, smartphones, and data center businesses are all expected to experience positive growth next year, as the data storage requirements per device continue to increase, and at the same time, the proportion of high-end products is also on the rise.'

He also said, "There is no doubt that the market is going through a period of adjustment. In terms of shipment volumes, we are currently in the most painful stage of this adjustment, but we believe that the market conditions will gradually improve from now on."

Intel market price: $65.42, down $26.65 (-28.95%), trading during the session at 11:55 Eastern Time.

Sandisk's stock price fell by 8%, most likely due to the negative impact of Intel's pessimistic warning.

So, regarding the storage chip market, who is right? The truth lies somewhere in between these two viewpoints.

But one thing is clear: the chip shortage benefits no one, and the shareholders of Intel and SanDisk are both greatly affected by it.

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