Posted by: donmihaihai | September 24, 2022

The near future

The huge increase in Capex and building lot of chip fabrication facilities in China, US and Asia look like to be the direct response to the tailwind partly caused by the pandemic.

The substantial increase in inventory level as a direct result from end user stockpiling had indirectly increase the tailwind partly caused by the pandemic.

I know we are sort of entering a digital age (I thought we are already in one), future usage and demand for semiconductors has only one direction, which is up.  And if everything goes smart and AI, that up can be really UP. But that doesn’t mean there won’t be periods of oversupply and companies dropping out of this train along the way.

Extrapolation of the recent past into the future is the dumbest thing in using a crystal ball. Thinking that if the company is so dominant in the industry that it can defiance the gravity of lower profit or losses or consequence of just being too powerful is close to the dumbest thing as well.

While Micro Mechanic might not avoid being hurt in the near future, it looks like it will avoid being in any worse situation because of its competitive position. The same cannot be say of most of the players in this industry including dominant companies.


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