Stale Chips
I'd call them inauspicious developments, but that seems trite. Seemingly all developments are inauspicious in 2022.
Instead, let's just say markets on Wednesday were presented with more evidence of a pernicious macro trend that's increasingly intertwined with geopolitical tensions.
Just hours after Texas Instruments guided below the Street for Q4 revenue and earnings, South Korea's SK Hynix said profits dropped 60% in Q3 to KRW1.66 trillion, nowhere near the 2.5 trillion analysts expected. But
The economy is slowing down. The real question is how deep is the pullback, how fast will it accelerate, and how long will this last?
The one constant amid every market vagary is the desire for prognostications. If only we could go long on Heisenberg?
Last night I saw one of the chip industry insider boards talking about America’s favorite company is giving a huge (ginormous) new chip order to TSMC in Taiwan. When we have to send the US military to Taiwan we can thank Apple and every one of you who buy their products.
Here are the top 10 customers of TMSC, so one can avoid supporting any US companies that purchase from TSMC.
Why limit yourself to not buying apple!!
https://www.statista.com/statistics/1247996/tsmc-revenue-share-of-leading-customers/
Because they really got the whole outsourcing momentum started. AMD eventually followed, as did QCOM, NVDA etc.
Funny how none of them seem to mention the risk that their actions put into place, though I’ll confess that I have not bothered to read through every footnote. Shame on me!
$360 to view that chart. Care to summarize?
I did not realize that was a “one time only” free look-
TMSC largest customers (percentage of TMSC revenues as of 2021)
Aapl 24%
AMD 10%
Qualcom. 8%
Media Tek. 8%
Nvidia. 8%
Broadcom. 7%
Intel. 5%
Will Semi. 2%
NXP. 2%
Marvell. 2%
I signed up and was told I had a “basic” account
Interesting SP500 off only 40bp with tech sucking wind GOOG -8% MSFT -6%. Need semis to finish breaking down and AAPL to join them, then I think SP500 will be buyable, much of the index already is, from a valuation standpoint (only my opinion).
Also interesting to see this from Mike Wilson at MS https://www.bloomberg.com/news/articles/2022-10-26/morgan-stanley-s-wilson-says-bear-market-may-end-in-early-2023
Although there’s some dissonance in what he’s reported as saying (again my opinion only) that’s roughly the same timeframe I have had penciled in. Break the last of the techs down, retest and hopefully break the summer lows, CBs forced to a stop-wait-and-see stance, get through most of the lag from house price/rent to CPI shelter, burn through more of well-off households’ cash and credit, and perhaps this bear market can be done – from levels lower than today, I both think and hope.
H-Man, nice post about another canary. That was a dour report but gets high marks for honesty. If you struggle to pay rent and buy food, new watches, lap tops, phones, cars move to the right side of the menu under special entrees.
I know people living on public assistance, can’t afford insurance or tires for their car or food other than the cheapest junk, who regularly buy new iPhones – not a refurb two generations old, which is what I get, but the latest and greatest.
The last thing many people will give up is their smartphone.
That said, I think even the mighty AAPL is going to cave, before we hit bottom.