There are no better canaries of the health of the semiconductor industry than the memory sector. It is the one that most closely resembles a classic commodity like wheat, pork bellies or orange juice. And it is quite poorly indeed: the indicators are flashing sell, sell, sell. If only the chipmakers sitting on stocks of unwanted memory chips could do the same.
Well, they will in the not too distant future. Unlike those other commodities, they don’t go off all that quickly, though if a crash comes ahead of a transition in process nodes, the weaker suppliers can find themselves having to dispose of older, less dense memory at bargain prices. And that could be a big issue for any that isn’t one of the top behemoths.
Malcolm Penn, president of analyst firm Future Horizons, made the point last year as the downturn got under way that some of these companies would be better off dumping a chunk of their stock in the river or, in these times, at least sending...