When Intel (INTC) failed to break out above its long-term resistance of $45, bears sold. INTC stock closed
at below $37 last week at prices not seen since 2017.
Bitcoin’s plunge to below $20,000 will increase the supply of graphics cards on eBay (EBAY). Investors
are bracing for lower GPU prices to hurt Nvidia (NVDA) and AMD (AMD). This will also pressure Intel’s
Arc GPU launch.
The chip scene appeared worse after Samsung (SSNLF) asked its suppliers to reduce procurement, citing
inventory pressure. Samsung is a giant chip producer. Its swelling inventories and its concerns about
global inflation are very bad news.
For months, Qualcomm (QCOM), Intel, Nvidia, AMD, ASML (ASML), Applied Materials (AMAT), and Lam
Research (LRCX) trended lower. The semiconductor sector is a forward indicator. It is signaling a warning
to technology investors.
Chances are high that demand weakened further in the last three months. It will continue falling for the
next three months. Demand for electronics will not recover until later this year. Investors need to
overlay higher inflation rates and a supply chain resolution. Inflation needs to moderate while supply
increases.
When those events occur, then chip demand will recover.
