The semiconductor sector has strong fundamentals, including high supplier bargaining power (ASML, TSMC), structural demand, and a lack of substitutes. The author believes the current shortage is ongoing. Despite historically high valuations, the sector has recently experienced a price drop. The author sees this as an opportunity to enter a long-term bullish trend at a better price. The author is initiating a long position in the semiconductor ETF (SOXX) with the expectation of adding more if prices continue to fall, betting on the sector's continued growth. A global recession could crush demand, geopolitical tensions (especially around Taiwan) could disrupt the concentrated supply chain, or the "supercycle" could be closer to its peak than the author assumes.
SOXX
HIGH
Mar 06, 21:34
Key Points
['Sector has strong supplier bargaining power (ASML, TSMC).', 'Structural demand and lack of substitutes support growth.', 'Author believes the semiconductor shortage is not over.', 'Recent price drop is viewed as a buying opportunity.', 'Author has started a position and plans to add more on dips.']
March 06, 2026 at 21:34