It's hot but distant clouds threaten the upturn

Andrea Lati

• Order activity for semiconductor equipment continued to cool off, falling by half a point to a still-hot 111 degrees
• Q1 results for equipment companies have been in line with our expectations for a sequential decline in revenues in Q1
• Despite the ongoing supply chain challenges and macro headwinds the outlook for the equipment market remains bright
  • Most of the growth will come in the second half of the year as the ongoing constrains subside
• Chipmakers have posted strong Q1 results
  • Their sales are on track to increase sequentially in Q1, in line with our expectations
• Sustaining this strong momentum for the remainder of the year will be challenging for semiconductors especially if the economic deceleration becomes pervasive
• Die bank inventories increased much faster than expected in Q1
• TechInsights’ Chip Price Performance Index flashed a warning sign
  • DRAM crashed
  • NAND declined
  • MPUs declined
• Hyperscale Fabless Capex is tracking above seasonality in Q1