Warning signs: Global semiconductor sales drop 14.5% in 1H19
digitimes.com
digitimes.com
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.
The economy is always a reliable source of news. And the mixed signals between employment, wages, and corporate performance makes it interesting.
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.
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.
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.
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.