Inventories are turning red, casting a pall over the industry

Order activity for semiconductor equipment extended its decline, slipping one point to 81 degrees in the second week of September
Memory led the decline as order activity slipped to 69 degrees, which is in contraction territory
The other largest segments, SOC Mobile and SOC Compute, held their ground at a warm 89 degrees keeping the overall order activity in positive territory
The August data from the Taiwanese manufacturers were in line with our expectations
It continued to show a bifurcating market environment—much like the order activity
- TSMC had a monster August with sales soaring to an all-time high
- While these record numbers are great for TSMC, they’re likely to fuel more excess inventories in the supply chain
Subcons had a strong August with sales jumping 25% from a year ago, the same rate as the previous month
On the Memory front, Nanya had an ugly month
On the Fabless side, MediaTek sales continued to slow, increasing only 4% on yearly basis
TechInsights’ Chip Price Performance Index pulled out of the dive
- DRAM fell
- NAND slipped
- MPUs declined
Inventories continue to build up