China lockdowns drag on earnings of chipmakers, industrials

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Industrial conglomerates GE and 3M, and chipmakers Texas Instruments and SK Hynix cautioned that China's COVID-19 led stringent curbs were further disrupting battered supply chains and hurting their revenue.China's 'zero Covid' policy to combat the Omicron variant has brought fresh lockdowns in many citie

Industrial conglomerates GE and 3M, and chipmakers Texas Instruments and SK Hynix cautioned that China's COVID-19 led stringent curbs were further disrupting battered supply chains and hurting their revenue.

"Collectively, supply chain issues, the Russia-Ukraine war and China COVID impacts adversely affected revenue in the quarter by about 6 per centage points," General Electric CEO Larry Culp told an earnings call on Tuesday. The company, which was already struggling with chip shortages and high raw materials costs, said it would continue to increase prices to offset inflationary and supply chain pressures, echoing GE that said it has already raised prices and invoked price escalation clauses in its service contracts.

"In the smartphone market, demand growth is slowing especially in China, and mobile memory chip shipments are expected to increase in the early single-digit percentage, which is slightly lower than expected at the beginning of the year," Kevin Noh, Chief Marketing Officer at Hynix, said on a conference call on Wednesday.

 

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