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Warning signs: Global semiconductor sales drop 14.5% in 1H19 (digitimes.com)
34 points by baybal2 72 days ago | hide | past | web | favorite | 14 comments

I wonder how much of the drop is attributable to memory industry. As some headline said: boom and bust is business as usual for memory. Though I don't feel bad for them, as they have been involved in one price fixing scandal after another.

Another obvious indicator on the path towards the nigh-oncoming recession or just a blip on the radar?

Personally I believe a recession is coming. I believe what we're seeing now are disparate pieces of information stacking up. Sales down here. Instability over there.

There's so much kindling laying around. It just needs a spark.

I too believe a recession is on it's way, but I have zero idea whether it is tomorrow or a decade from now. Everything feels overhyped and full of scammy cash, nothing feels sustainable, and we didn't learn much from 2008. But my feeling can't help anyone or anything.

Trump, China, Iran, Brexit... there are a lot of possible sources of sparks.

Please don't editorialize titles.

Seems like every day now there's a blatant "Huge Recession Incoming! Brace Yourselves!" type story floating to the top.

To be fair, nearly every day information surfaces that indicate that a recession is imminent/already here. Trade war fallout, Fed wavering on raising rates, yield curve inversion, poor performance 2019H1 for so many key companies.

The economy is always a reliable source of news. And the mixed signals between employment, wages, and corporate performance makes it interesting.

Semiconductor industry is a very reliable canary for the long term economic situation.

Semi industry employs top economists. It is critically important for them to have extremely thorough economics research when they decide on their financials. Fabs cost billions, and whole fab complexes close to $10B. They take many years to construct and make running.

Financing plans for them have to be done impeccably, and account for way more than capital forecasts.

The financial outlook for a fab changes dramatically depending on how the world changes during its construction. The few fragments of such report done for TSMC I saw included everything down to political, cultural, and technological black swan events.

One of the most bizarre one that they actually managed to predict was the current regulatory and sociocultural "dotcom backlash".

For example, they see big server chip buyers like Facebook, Amazon, Google greatly scaling down their ambitions, and therefore they did not include the option for big reticle sizes in their lithography equipment buy list.

It has been that way for as long as I can determine. There are always bad signs. Sometimes the doom is hours away, sometimes it is years away and in a completely different area. I have no idea how to tell the difference and I don't believe anyone else does either.

There are things you should do to prepare yourself. There are things you can do to prevent doom. They are all things you should be doing anyway even if God told you things would be alright for many more years.

Between 2014 and 2018 or so, the mainstream economic outlook was really good. Unemployment feel below 5%, consumer confidence finally turned positive, economists were complaining about Yellen's continued doveishness towards interest rates when economic indicators showed things were strong, then the tax cuts and associated bonuses and reinvestment.

Brexit happened in mid 2016, the US trade wars start up in late 2017, consumer confidence fell off a cliff last year, etc.

Yeah, there's segments where doom and gloom is perennial. But mainstream reporting tend to report based on fundamentals such as employment, wages, corporate profits, etc.

Look outside the mainstream and you would have seen the people warning about the crash to come then. Nothing came of it as it turns out, but many crashes are not seen in the mainstream press in advance either so that doesn't mean much.

Measuring by dollar amount isn't helping. Silicon prices fluctuates wildly and easily more than the 15% we're seeing here.

Wild guess:

A) People hanging on to both phones and PCs longer as Moore's slows down. Maybe also cars, because of higher quality over time.

And less so, but perhaps a contributor:

B) Big cloud providers are better at getting high utilization out of the same number of CPUs. So, as load moves from on-prem to cloud, overall footprint drops.

2/3 of my home pcs are more than 5 years old, all are reliable and performant for my purposes.

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