SB Talks: Chipwreck & the Global Crosscurrents

Let's open by talking about the semiconductor index.

Last week headlines grabbed quite choppy trading for chip makers.

Tell us what was happening there and what were the triggers?

Yeah, I think it was a bit of a sort of rotation, you know, that it obviously had a very strong run.

Bloomberg coined the term chipwreck,

which

I thought was funny.

But we've had the Philadelphia Semiconductor Index rise 94% year to date, and the KOSPI, which is the Korean Stock Exchange index, which is dominated by Samsung and SK Hynix, both chip makers.

That's up 95% year-to-date, even after the pullback from last week.

So it's been a very strong run for chip makers.

Potentially

due a bit of a breather.

Yeah, and by all reports, there's a bit of speculative money that started to come into those markets.

People buying leveraged ETFs in Korea and potentially also in the US.

So it's become a bit of a momentum trade.

So, you know, not surprising.

We're getting a little bit of a pullback.

We did have Micron report last week.

Pretty good earnings, very good earnings.

In fact, they're up 300% year to date.

They're a memory chip maker.

And SanDisk, they're up about 800% a year to date.

So, you know, what we're seeing, I guess, is people saying, well, we're unsure really how this AI trade's going to play out.

But it's clear that the chip makers are the primary beneficiaries, at least at this stage.

And the market has anointed them not as such, at least in the first wave of this investment.