"By the end of the year, 15 new fab projects with a total investment of US$38 billion will have started construction and 18 more fab projects will kick off construction in 2020. Of the 18, 10 fab projects with a total investment value of more than US$35 billion carry a high probability. The other eight, with a total investment value of more than US$14 billion, are weighted with a low probability of materializing."
"Taiwan-based wafer foundry sales are often a leading indicator of global semiconductor shipments. They turned up significantly in August. Per Chart 8, SEMI equipment and semiconductors will likely be led by foundry sales, reinforcing the prediction of a resumption in semiconductor chip and capital equipment growth in late 2019 or early 2020."
- Semiconductor industry analysts have been projecting an H2 2019 bottom for the Semiconductor sector cycle, after extreme growth followed by inventory buildup whacked the industry in 2018.
- In 2013 we used the sector as a canary in the economic coal mine. It chirped and we projected an economic up phase out ahead. The economy then ground upward over a span of months and years culminating in 2018's 'as good as it gets' economy (ref. the economic laggards, payrolls and unemployment levels).
- The canary has been on life support, but he's not dead yet and the charts currently say he's going to chirp again. Industry data are still preliminary and tentative, but the balance of the picture indicates a strong Semi sector in 2020.
- This would paint any coming stock market correction, mini or maxi, as a blip before a bullish resumption into the next US presidential election.
- As for the various 'reflation trades', they should participate if cyclical inflation is at the root of it, which I think stands a good chance of being the case.