We are all watching the big game. The NASDAQ 100, historically overvalued, and historically top heavy, looks about to drag all that weight to a new all-time high.
Meanwhile the CEO of Acer is talking about a chip glut again.
https://money.udn.com/money/story/5612/9764832
“Chen Chun-sheng stated that the price increases of key components this year are unprecedented, with customers going from complaining to scrambling to buy. Acer has also increased its inventory of low-priced components to cope with the situation. However, overall, the company faces pressure to raise PC prices every quarter, and the price of different products is expected to increase by 5% to 20% in the fourth quarter.
Chen Junsheng has always accurately grasped the price trends of components. He pointed out that there is still a shortage of some components, such as LPDDR5 or DDR5 9600, which need to be paired with N1 or N1X memory. However, there is more oversupply, such as with DDR4, where there are more sellers than buyers.
Chen Chun-sheng pointed out that due to the massive production capacity and relatively low prices of memory manufacturers in mainland China, they are price disruptors. The three major memory suppliers have been predicting that prices will continue to rise until 202X in order to maximize profits. However, mainland China has a different strategy and has released unlimited production capacity, which means that prices are no longer likely to continue to rise.
Chen Chun-sheng pointed out that memory suppliers have been frequently saying they are optimistic about price increases until 2027, and even Apple has compromised and accepted Samsung’s contract price increase. Regarding this phenomenon, he bluntly stated that under antitrust regulations, companies can only communicate with each other through such signals, and those who understand will understand.
In response to reports of memory chip shortages, he stated, “No way! How could there be a continuous shortage? China’s production capacity has been consistently increasing, and there is absolutely no shortage issue. Contract prices are currently fluctuating at a high level, with some prices going up and others down, causing a bit of confusion.”
Interpreting this news, which is from a few days ago, before the big run up yesterday, is fraught. Nevertheless, it aligns with what I believe to be true.
