mlsoft
I sold half of my large MU position Friday, as well as a bunch of other semis, and am now net short the group. Friday looked like a top to me. But I have to disagree with your assessment of the fundamentals. DRAM contract prices have been firm to up, and I think I mentioned that MU now is on allocation. I suspect the rest of the market is tight, and I think it is only a matter of time before spot prices move higher. Demand has indeed been improving. You don't have to believe me...just look at INTC. Capacity is hard to judge, because of obsolescense and shifting to other product areas, such as SRAM and ASICs (which has been occurring). In any case, capacity is a lot tighter than most believe, because so much of it is uneconomical, and just a tiny fraction at 300 mm / 90 nm (which seems to have technical problems, especially for low k). And finally, inventories are very tight. All of this, combined with the seasonals and very modest expectations, are an explosive mixture IMO. These comments could also apply to the rest of the semi industry aside from DRAMs.
I am more bullish on the semi fundamentals than I have been in a long time. The valuations and the technicals keep me on the sidelines for now, but I'll be back if we get a retrenchment.
AI
