Semiconductors Are The "Shitco" Sector: Harris Kupperman
Quoth the Raven
· QTR’s Fringe Finance
· June 05, 2026 at 16:01
· ⏱ 2 min read
| Read on Substack ↗
Summary
Harris Kupperman warns that semiconductors are a deeply cyclical, capital-intensive sector prone to multi-year busts after manias, comparing the current AI-driven frenzy to the dot-com bubble. He argues that despite real AI profits, the sector's structural flaws—technological obsolescence and massive fab costs—make it a 'shitco' industry where investors should brace for a painful down-cycle. The article implies that current semiconductor valuations are unsustainable, but offers no actionable trade ideas.
•Semiconductors are 'incredibly cyclical with multi-year boom and bust cycles' and 'unusually capital intensive as fabs cost billions to assemble.'
•The author draws parallels to the 2000 dot-com peak, noting that after that super-cycle 'the road down was brutally painful' and many high-flyers later resorted to toxic financings.
•Kupperman admits he missed the AI-driven long side but argues that 'semis are still highly cyclical' and a painful down-cycle is likely after the peak.
•The article references 'triple-ordering' during the dot-com era, where orders vaporized as companies went bankrupt, a pattern that may repeat.