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Is Dr. Semiconductor right about the cycle?

Is Dr. Semiconductor right about the cycle?

  • The semiconductor market reached a record high in 2018 (USD468bn). The adoption of new technologies (5G, autonomous vehicles, augmented and virtual reality) are long-term drivers.
  • Yet, the semiconductor market is experiencing a major trend reversal since end of 2018, in line with the economy. Global sales of semiconductors dropped by -13% y/y in Q1 2019, with no exceptions in terms of regional markets.
  • The US banning of technology sales to Huawei is likely to accelerate the fall in semiconductor sales.

Change in global semiconductor sales and global GDP

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sector inflation risks
sector inflation risks

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China: Riding the silicon ox?

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Big Tech and the S&P 500: A double-edged sword?

Entropy shows that the current degree of concentration in the S&P 500 is historically high.

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The prolonged supply-chain disruption likely due to future targeted lockdowns and companies’ precautionary stockpiling will push inventories up in H2 2020.

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Focusing on firms with a turnover exceeding EUR50mn, our Q3 2019 monitoring points to quarterly rebound in major insolvencies.

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