The electronics inventory cycle
How we read Taiwan's electronics inventory cycle: the complete guide, the 2022 correction reviews, and the quarterly inventory reads from 2020 to 2024.
These pieces are kept as written at the time. Charts are the originals from the time of publication.
- 2024-11-14 · Written in 2024The Complete Guide to the Electronics Inventory Cycle, Part 1: Taiwan's Preliminary Inventory Sell Signal Has Fired
Taiwan's preliminary sell signal fired in September 2024. Past cycles say the electronics index falls 18% to 26% over the following five to nine months.
- 2024-11-26 · Written in 2024The Complete Guide to the Electronics Inventory Cycle, Part 2: Exponential AI Growth Has Rewritten the Industry Structure Behind the Cycle
This sell signal hits a changed sector: on 2025 estimates NVIDIA and TSMC are 42% of Philadelphia Semiconductor Index revenue and 61% of its net income.
- 2024-12-19 · Written in 2024The Complete Guide to the Electronics Inventory Cycle, Part 3: Trends Outlive Cycles, and Ten Years of TSMC Proves It
Ten years of TSMC inventory signals: every time the rule sold, it had to buy back higher. The 2024 signal splits the sector, non-AI 2025 estimates cut 6.4%.
- 2025-05-13 · Written in 2025The Complete Guide to the Electronics Inventory Cycle, Part 4: Taiwan's Final Sell Signal Has Fired
Taiwan's April PMI put new orders at 47.5 against customers' inventories at 47.7, the final sell signal of this electronics inventory cycle.
- 2022-06-07 · Written in 2022Inventory Correction Review, Part 1: NVIDIA in 2018 Is the Map for 2022, and Inventory Corrections Hit Consumer First and Data Center Last
NVIDIA's May 2022 quarter is August 2018 again: inventory called normal, guidance light. Last time, data center took three more quarters to turn negative.
- 2022-06-08 · Written in 2022Inventory Correction Review, Part 2: US Cloud Capex Whipsawed in 2018 and 2019, and Corporate Profits Were the Reason
US cloud capex swung hard: cut in the third quarter of 2018, revised up 8% for 2018 and 11% for 2019, then down 11% year over year.
- 2022-08-24 · Written in 2022Electronics Inventory Corrections: What 2015 and 2018 Say About How Long and How Deep This One Runs
Past electronics inventory corrections bottomed in about six months. Cloud and software net income estimates are down 7% to 10% in 60 days.
- 2022-12-01 · Written in 2022Taiwan's Electronics Inventory Signals Will Not Call the Low: How a Trend Follower Trades Them
Taiwan's electronics inventory sell signal fired on May 2, 2022. Ten years of data say the index low prints before the buy signal, after drops of 20% plus.
- 2024-03-27 · Written in 2024Taiwan's Electronics Inventory Cycle Gives Another Buy Signal, and Ten Years of Data Say the Rule Still Works
Taiwan's electronics inventory cycle gave a buy signal in November 2023. The last three ran four to six quarters, with the electronics index up 30% to 50%.
- 2022-11-28 · Written in 2022Taiwan's Electronics Destocking: Third Quarter 2022 Filings Put the Light at the End of the Tunnel in Mid-2023
Third quarter 2022 filings: excluding TSMC, Hon Hai and MediaTek, Taiwan tech operating profit fell 25% year over year. We put the buy signal in mid-2023.
- 2022-08-21 · Written in 2022Q2 2022 Taiwan Electronics Earnings: Inventory Pressure Is Severe, and Profit Has Tilted Hard Toward Foundry
Taiwan electronics inventory days hit a post-2010 high in Q2 2022, up 15 days from a year earlier, while foundry took close to 60% of sector operating profit.
- 2022-05-23 · Written in 2022Q1 2022 Taiwan Electronics Earnings: Inventory Has Hit a Record Extreme, and Export Orders Just Turned Negative
Taiwan electronics inventory days rose 8.9 days year over year in Q1 2022, a record, and export orders just turned negative for the first time this cycle.
- 2022-05-06 · Written in 2022The Sell Signal Has Fired: Taiwan's Electronics Supply Chain Is Heading Into an Inventory Correction
Taiwan's April 2022 PMI turned new orders minus customers' inventories negative: the sell signal that ends a near three-year electronics inventory bull run.
- 2022-04-27 · Written in 2022Taiwan Electronics Is Carrying Record Inventory, and the Sell Signal Is One Step Away
Taiwan Q4 2021 filings: record profits, but inventory days rose 9.8 days year over year and electronic component makers added 13 days.
- 2021-08-15 · Written in 2021Consumer Demand Is Rolling Over: Watch for the Turn in Taiwan's Electronics Inventory Cycle
Taiwan's sell signals have not fired, but information and communication technology export order growth fell to 7% and the diffusion index hit 37.7.
- 2020-11-30 · Written in 2020Q3 2020 Taiwan Electronics Earnings: Component Inventory Is Still Healthy, and the Earliest Sell Signal Is Q2 2021
Q3 2020 filings: Taiwan component inventory days fell from Q2, revenue rose 4% and profit rose 27%. A sell signal could come as early as Q2 2021.
- 2020-10-12 · Written in 2020Taiwan's Electronics Inventory Cycle Stretches Into the First Half of 2021
Taiwan's electronics inventory cycle has more room to run. We see the bull leg lasting into the first half of 2021, with the sector up 44.7% since August 2019.
- 2020-04-25 · Written in 2020Chipmakers Are Restocking Into the Second Half of 2020, and TSMC's Own Full Year Outlook Says Demand May Not Be There
Texas Instruments is building inventory into the second half of 2020, Intel warns of a data center correction, and TSMC's own 2020 outlook is soft.
- 2020-01-19 · Written in 2020Taiwan Electronics Is Not Done Yet: Inventory Days Say One to Two More Quarters of Bull Market
Taiwan's inventory cycle turned bullish in the second quarter of 2019 and the electronics index is up 17.3%. History says one to two quarters left.
- 2023-03-30 · Written in 2023End of the Long Credit Cycle, or the Start of a Short Inventory Upturn? Why We Sat Out the First Quarter of 2023
Markets are paying for a sharp fourth quarter 2023 earnings rebound and SOX at 22x forward. The inventory buy signal has not fired and credit keeps tightening.
Other collections
How we invest: notes on methodTrack record: the calls and the checksAI main line, 2023 to 2025Earnings and supply chain notes, 2019–2022