Silicon Wafers and What They Tell Us
Collapsing demand for silicon wafers is signaling further global economic slowdown.
Silicon wafers are the raw material used for semiconductors. It’s the pig iron that gets turned into steel, the concrete that becomes roads. Except that semiconductors have a far broader and deeper reach in the 21st century economy. That is, demand for silicon is a pure reflection of economic demand, but just slightly in the near future since that silicon has to be turned into semiconductors first and then integrated into things to then get sold.
Simply put, in a growing economy where production and durable goods demand is expanding, silicon wafer demand is growing.
This post was published at David Stockmans Contra Corner on January 29, 2016.
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