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Chip industry had worst sales year since dot-com bubble burst

bloomberg.com

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Re: Chip industry had worst sales year since dot-com bubble burst

#61

Post by bitxbit »

totalZero wrote: post #20
jackhack wrote: post #10

Agreed, this news doesn't square with market performance. For instance, FSELX (Fidelity Select Semiconductors portfolio) mutual fund is up 43% over one year, doubling the performance of the S&P500. Top-10 holdings (68%) include Intel, Qualcomm, Broadcom, Nvidia, Micron, Marvell, ON, NXP, FLex, Commscope, so it's a fairly broad measure. For this cross-section to be performing so strongly, others must be circling the d…

In saying that there cannot be a turndown because stocks are rallying, you are not comparing apples to apples. Companies can circle the drain while their stock rallies. Companies can do good business while their stock gets crushed. First, people are buying equities in general because interest rates are being held low artificially by the Fed, which has been pressured by the President to do this. Second, few traders an…

I can’t agree with you there. I would say most professionals trading these stocks in volume know more about tech than what’s being discussed here. I speak from my own experience but Wall Street has changed quite a bit in the past two decades and domain knowledge is what gets you paid. These guys also have access to c-suites to continue to build on domain knowledge.

Re: Chip industry had worst sales year since dot-com bubble burst

#62

Post by coliveira »

jackhack wrote: post #10

Agreed, this news doesn't square with market performance. For instance, FSELX (Fidelity Select Semiconductors portfolio) mutual fund is up 43% over one year, doubling the performance of the S&P500. Top-10 holdings (68%) include Intel, Qualcomm, Broadcom, Nvidia, Micron, Marvell, ON, NXP, FLex, Commscope, so it's a fairly broad measure. For this cross-section to be performing so strongly, others must be circling the d…

And that wouldn't be the first time semi stocks do well right before a crash. In 2000 they did fabulously, but at the expenses of the largest number of unprofitable tech companies ever. According to some, we're following the same path.

Re: Chip industry had worst sales year since dot-com bubble burst

#63

Post by fred_is_fred »

lwb wrote: post #42
baybal2 wrote: post #12

I wrote before that semiconductor industry economists were awaiting a crash for a very long time. At least since 2016, I saw notion of a coming crash coming from very esteemed industry publications that cost few thousand bucks to access. Everybody in semi knows of the cyclical nature of the industry, and the non-stop long bull run since 2008 looked very unusual to many. Why is this so important? The reason is that fe…

> tenths of billions Do you mean tens of billions? The difference is two orders of magnitude :)

I assume OP meant tenths of trillions.

Re: Chip industry had worst sales year since dot-com bubble burst

#64

Post by coliveira »

totalZero wrote: post #20
jackhack wrote: post #10

Agreed, this news doesn't square with market performance. For instance, FSELX (Fidelity Select Semiconductors portfolio) mutual fund is up 43% over one year, doubling the performance of the S&P500. Top-10 holdings (68%) include Intel, Qualcomm, Broadcom, Nvidia, Micron, Marvell, ON, NXP, FLex, Commscope, so it's a fairly broad measure. For this cross-section to be performing so strongly, others must be circling the d…

In saying that there cannot be a turndown because stocks are rallying, you are not comparing apples to apples. Companies can circle the drain while their stock rallies. Companies can do good business while their stock gets crushed. First, people are buying equities in general because interest rates are being held low artificially by the Fed, which has been pressured by the President to do this. Second, few traders an…

Everything you say is true, but traders are only reacting to the money supply. The FED has been cranking dollars at a level that in unheard of since the depths of the Great Recession. It seems that they're committed to reelect the person in the HW at any cost. This money has to go somewhere, and for traders so much better if this all comes crashing later, there's more money to be made on the downside.

Re: Chip industry had worst sales year since dot-com bubble burst

#65

Post by uoaei »

mrspeaker wrote: post #29
ksec wrote: post #28

>Revenue fell 12% to $412 billion in 2019, ....That’s the biggest drop since 2001, when industry sales slumped 32% as the dot-com bubble burst. In 2001 post Dot Com Bubble, that 32% drop was real . The 12% drop in 2019 was only due to NAND and RAM went from Record High and back to "normal". Samsung was the most profitable company in 2018 simply because NAND and DRAM. Almost everyone in Semiconductor industry is makin…

I know we're being trained to hate journalists these days, but that quoted sentence is just stating a fact: the biggest drop since dotcom bubble... and the article reads very reasonable. I don't see anything controversial in there - seems to balance the negatives with things like "the rate of decline abated" and "the decline in industry sales didn’t stop investors betting on a future rebound." - how is that sensation…

The article cannot be distilled to that single sentence. Framing the financial facts as a precursor to a recession by explicitly referencing the last tech bubble that burst carries with it implications that a skimmer may take away from the article if they weren't reading very critically. This is what FUD looks like in the wild. It's much more subtle and devious than the millions of Twitter bots spamming "sell $TSLA".

Re: Chip industry had worst sales year since dot-com bubble burst

#66

Post by cat199 »

ksec wrote: post #28

>Revenue fell 12% to $412 billion in 2019, ....That’s the biggest drop since 2001, when industry sales slumped 32% as the dot-com bubble burst. In 2001 post Dot Com Bubble, that 32% drop was real . The 12% drop in 2019 was only due to NAND and RAM went from Record High and back to "normal". Samsung was the most profitable company in 2018 simply because NAND and DRAM. Almost everyone in Semiconductor industry is makin…

> Bloomberg is quickly becoming BuzzFeed for financial news.

"Bloomberg News Pays Reporters More If Their Stories Move Markets"

https://news.ycombinator.com/item?id=18162440

Re: Chip industry had worst sales year since dot-com bubble burst

#67

Post by cbhl »

mrspeaker wrote: post #29
ksec wrote: post #28

>Revenue fell 12% to $412 billion in 2019, ....That’s the biggest drop since 2001, when industry sales slumped 32% as the dot-com bubble burst. In 2001 post Dot Com Bubble, that 32% drop was real . The 12% drop in 2019 was only due to NAND and RAM went from Record High and back to "normal". Samsung was the most profitable company in 2018 simply because NAND and DRAM. Almost everyone in Semiconductor industry is makin…

I know we're being trained to hate journalists these days, but that quoted sentence is just stating a fact: the biggest drop since dotcom bubble... and the article reads very reasonable. I don't see anything controversial in there - seems to balance the negatives with things like "the rate of decline abated" and "the decline in industry sales didn’t stop investors betting on a future rebound." - how is that sensation…

The headline I'm seeing says "worst sales year", and I would expect that to be measured by the top-line revenue number, not in the y/y drop in revenue.

Re: Chip industry had worst sales year since dot-com bubble burst

#69

Post by dylan604 »

pkaye wrote: post #26

I used to work in the semiconductor equipment industry in the 90s and it was quite cyclical. One year the demand was great and they were hiring like crazy and the next year things were looking dismal and they had to do layoffs. This repeated many times though the overall trend was of growth. I managed to stick around for some time since I was in R&D and with a bit of luck. Things smoothed out considerably over the de…

Does this follow companies not buying new equipment annually, but wait a couple of years inbetween before the next upgrade?

Re: Chip industry had worst sales year since dot-com bubble burst

#70

Post by powowowow »

ksec wrote: post #28

>Revenue fell 12% to $412 billion in 2019, ....That’s the biggest drop since 2001, when industry sales slumped 32% as the dot-com bubble burst. In 2001 post Dot Com Bubble, that 32% drop was real . The 12% drop in 2019 was only due to NAND and RAM went from Record High and back to "normal". Samsung was the most profitable company in 2018 simply because NAND and DRAM. Almost everyone in Semiconductor industry is makin…

It wouldn't be HN if there wasn't a disgruntled PHP dev ignoring most of an article that wasn't written for his audience and pretending that the actual audience is being misled.

Thank you for white knighting to the defense of people who read business news. They are all so grateful for your insights.

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