Chips Kept Slowing in October


Growth slowed in the chip space for the fifth straight month in October.

The Semiconductor Industry Association reported earlier this week that sales grew just 12.7 percent. It was the smallest gain since December 2016, and continued a pattern of weakness that began in June:

  • May’s growth was 21 percent.
  • June’s growth was 20.5 percent
  • July’s growth was 17.4 percent
  • August’s growth was 14.9 percent
  • September’s growth was 13.8 percent.
  • October’s growth was 12.7 percent.

Slowing smart-phone orders, highlighted by a selloff in Apple (AAPL), are big part of the trend. Several companies have also issued disappointing results or guidance since our last report. Those include Skyworks Solutions (SWKS), Nvidia (NVDA), Qorvo (QRVO), Applied Materials (AMAT) and Cirrus Logic (CRUS).

In conclusion, semiconductors have lagged the broader market since the spring. And news from the industry shows the weakness is justified.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.