With more than a year of global chip supply shortages, strong demand has sent shares of major semiconductor manufacturers soaring for several consecutive quarters, but Truist analyst William Stein recently warned that the trend may be turning.
William Stein pointed out in a research report that demand signals began to turn negative on Wednesday, including computer, consumer electronics and communications OEMs, and even semiconductor suppliers for more than half of these OEMs. He believes that the decline in demand is mainly related to production in the second quarter, but the overall market demand remains strong in the second half of this year.
While there could be a single-quarter correction or a temporary downturn, he remains concerned that if the level of demand destruction is properly combined with additional capacity additions, it could lead to a turn into a cyclical recession.
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