Last night the semiconductor equipment trade organization SEMI released their latest equipment book/bill figures (for August.) Bookings were up nearly 70% year/year, while billings (installed equipment) rose 65%. Both growth rates are far higher than the 11.5% year/year growth in semiconductor demand in July. (August figures for semis are not yet released.)
It is beginning to look like a turning point is near (bulls would argue we missed it last month). The enormous quantities of manufacturing equipment ordered over the last several months are now being installed, and will soon affect inventory levels. Meanwhile, the rate of growth for new orders is slowing down (and we believe some of the existing orders will be pushed back or canceled altogether). So the seeds to solve the problem are also being planted.
We think a slowdown in consumer spending will affect the holiday spending on consumer electronics more than the market currently expects, and that this will cause a final (for this cycle) plunge in semiconductor prices in the relatively near future. After that, it looks like the clouds may finally pass.