In this case, we find the capex heavy chip business with major agita.
Meanwhile, smaller peers Abu Dhabi-owned GlobalFoundries and China's Semiconductor ManufacturingInternational (NYSE:SMI) are struggling.
"GlobalFoundries (is trying) to grow into existing capacity as its parent deals with sharply lower oil prices," he wrote. And, "while Semiconductor Manufacturing is growing capacity mid-teens, its revenue base is less than 10% of Taiwan Semiconductor's size. . .."
All that capacity, and minimal growth in, or even slack, demand. Soon, the physics and engineering of chips will hit The Wall. It will be world sorta, kinda like a pharma world where every drug is generic; anyone who wants to run a fab has exactly the same machinery, since Newton and Heisenberg say so. I wonder whether all those nascent coders that Bill Gates wants will be happy campers? Plumbers and nail pounders in FL will be making more. There was a time when the American, at least, economy rewarded brains and learning over simple minded brawn. May be not so much now and the future. Just as that shill Dan Gilbert touts Prudential Insurance in the midst of a global savings glut (save more, you'll earn great interest, just buy a Prudential variable annuity), turning out ever more coders just reduces the per coder income. There's not much objective about economics, really, but supply and demand do make a difference. Some times one or the other is manipulated, but there will always be a market clearing price, as you heard in the first week or so of Econ. 101.