CNBC reports Chip Stocks Plunge After Warnings on Demand from Wall St and a Key Industry Player.
>”Memory markets have worsened in recent weeks. For DRAM [memory chip], demand is weakening, inventory and pricing pressures are building, and vendors are struggling to move bits,” Morgan Stanley analyst Shawn Kim said in a note to clients Thursday. “In NAND [flash memory], there is just too much supply. Earnings risks are emerging from 3Q and our cautious view on memory is playing out.”
>”All your three big drivers [PC, mobile, data center] for demand has worsened actually quite substantially in the last two weeks and will drive lower pricing into the third quarter. … Because of this lower demand, inventories are actually piling up [at Samsung and Hynix],” Kim said on a Morgan Stanley “Sound Bites” audio call Wednesday.
Micron Weekly
Micron is down 9% for the day and 14% for the week, but it has had an amazing rally from under $10 to over $60 in two years.
Beautiful Bubble Symmetry
One has to appreciate the beautiful bubble symmetry. On the monthly chart, support is at $10.
Rising Tech Inventories
Bloomberg reports Dark Clouds Gather as Tech Stockpiles Hit Pre-Crisis Levels.
>Storm clouds are brewing over the global technology industry.
>A host of hardware companies, including Apple Inc., Samsung Electronics Co., Foxconn Technology Group and Intel Corp., are sitting on inventory stockpiles not seen since the financial crisis a decade ago.
>Stockpiles escalated rapidly over the past year, with inventories surging at Apple and its chief supplier, Foxconn. Intel’s numbers are also high, while weaker revenue at Samsung is exacerbating the problem there.
>Samsung is the most complicated to analyze because the company has its fingers in so much of the supply chain: It manufactures the components, assembles devices and sells under its own brand. That makes it difficult to pinpoint precisely which part of the firm’s inventories are most problematic. Yet that also means Terry Gou’s flagship is among the best examples of the industry’s end-to-end challenges.
Lather, Rinse, Repeat
We have some serious flushing to do.
Mike “Mish” Shedlock
The industry has produced very little worth buying or upgrading to for the past 7-8 years. An i7-2600 that could be bought for a little over $200 back in early 2011 still is judged, even by hardcore gamers, as being perfectly adequate. I don’t understand where all the demand has come from over the past few years, other than the crypto miners. Who are almost certain to be dumping large amounts of equipment on eBay imminently, much like mountains of Cisco and Nortel gear was on sale in the aftermath of the 2001-2002 blow-out. LCD screens, most users are getting a good decade out of them while CRTs had 3-5 year replacement cycles.
Top of line CRT TVs (like Sony XBR series ) routinely last 15 years … with superb resolution
Diminishing returns is one of, if not the, most fundamental laws of economics…. Just saying…….
Keep plugging away at improving something, and no matter how rapid the improvements, no matter how “expopnential,” eventually the utility function of the capacity you improve, will be flat enough to render even a quadrillionfold improvement per second pretty much irrelevant.
Which is, conveniently, why one of the most surefire ways to tell someone is either economically completely illiterate or out to sell you a bag of scam, is to hear them wax on about how “technology” is “now” improving at a faster and faster rate, per current fashionable practice amongst card carrying members of the idiotocrati.
Inventories not seen since 2008 Financial crisis…and the inventory charts go all the way back to 2013?
I wonder to what extent the recent semiconductor boom can be attributed to cryptocurrency mining.
Those chips are generally special to the best of my understanding so probably not
Not entirely accurate. Bitcoin is mined with specialized ASIC hardware but most of the other cryptos are still done with video cards, causing shortages and wild gouging in the market for those.