DCA on SOXX

$iShares Semiconductor ETF(SOXX)$

SOXX declined more than 3% over past 5 days (especially last night) due to renewed fears of inflation and the impending downcycle of semiconductors. Yesterday Germany reported its PPI hit 37%, while UK reported CPI of 10.1% for July! This caused a new panic in the market last night as EU and UK are deemed as “behind the curve” and will most likely raised interest rate in the coming months. As usual, semiconductors are the “cyclical” sectors and not spared in the sell-down.

Various semicon giants have signalled during earnings call that end-customers are adjusting down their inventory and this will last for 2-4 quarters. It used to be just smartphone and consumer electronics OEM, but recently there are news that even server/data-center clients are also slowing down the chip procurement orders. While the downcycle is impending, I remained confident on the future of semiconductors as the world becomes more digitalised and hyper-connected. Hardly any electronic devices are made without chip now, and advance chip will be even more highly demand in the future as consumers demands better smart living experience.

Currently SOXX has a PE of ~18 times which I think its still quite expensive. If SOXX drop by another 10%, value will emerge and I may start DCA again :)

@TigerStars@CaptainTiger@Daily_Discussion