Order Activity is Cautiously Warming up

Shereen Vaux

Order activity for semiconductor equipment increased to 56 °F. Order activity continues heating up for subcontractors/advanced packaging to alleviate the bottlenecks still seen there. Micron’s earnings release came in slightly above expectations last week. Inventories increased in calendar year Q3 2023 at the nominal level but came down as a percentage of sales, which is a good indication that we are on the path to recovery. Micron is also starting to see demand improve as inventories at its customers have started to normalize. We should start to see Micron’s inventories come down (at the nominal level) as production cuts across the industry are helping to restore balance to supply. As expected, Micron confirmed memory prices are at an inflection point which we have been seeing in the spot market over the last month. Pricing gains should continue throughout 2024 setting the stage for a record year in 2025.