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The chips are down

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By Marshal John Mdeza:

Technology be it your smart phone, tablet, laptop or desktop computer thrives on four major components; computer — chip, memory, graphics engine and storage.

The rest are really add-ons. These four components are made from semiconductor. It is rightly called semiconductor because that is exactly what it is; at one time is able to let current pass through and do the opposite with different condition. You surely need not know that gibberish to operate your gadget.

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What is important to know is that computer chips do not understand English, Chinese or Yao. Computers speak the language of ones and zeros. One is when the semiconductor al lows voltage in and zero is when the semiconductor does not allow the voltage. So, semiconductor generates the alphabet of the computer chip and its associates.

Once again; how does that help you understand the behavior of your gadget? Outside the hood, that smart phone has been trained to interface with you in English or whatever your language is, so why bother?

The thing is price fluctuations of semiconductor on the world market make the prices of technology catch a cold. Well, it so difficult to overlook semi-conductor in computer speak no matter how good the effort.

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For the moment, semiconductor revenues have taken a tumble; watch out, prices of technology may summersault just as well.

However, this may also mean falling demand for technology. Samsung Electronics has come out the most wounded Semiconductor Company amongst the lot. In Q1 2019, Samsung shred 34.6 percent compared to the same period in 2018.

Samsung’s revenue was $12.17 billion in the first quarter of 2019 compared to $18.61 billion in the same quarter in 2018.

This was enough for Intel to push Samsung from the top position to number two as a semiconductor company.

Intel lost marginally by 0.3 percent. This is probably because Intel is so much in the PC technology sector while Samsung heavily computes in the smartphone semiconductor as well. Intel is also in the smartphone area but basically is into modems and not so much into chips for smartphones.

There were also other big losers; SK Hynix, a popular RAM company lost 26.3 percent, Micro Technology shed 22.5 percent and the graphics engine king, nVidia pruned 23.7 percent.

Comparably, the American Smartphone chip maker, Qualcomm did not lose much; it only dropped 6.3 percent revenue.

What has been the effect of this on the global technology market? Global computer chip market fell from $106.2 billion to $111.2 billion from Q1 2018 to Q1 2019. This means that there were fewer computer chips that were sold during this period.

Semiconductor prices behave like oil prices. Semiconductors sales have not dropped this much for a long time. When the chips are this down, prices for gadgets get an attitude and go down. If you are expecting the next iPhone refresh, you have a reason to be happy, it may emerge cheaper

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