UMC - Chip Shortage May End Semis' Perfect Storm Prematurely

• The second leg of the prolonged chip shortage has finally started causing some real damages to semi-related companies.
• Both the fading WFH trend and slowdown recovery may wipe out the previously unfilled demand. The prolonged chip shortage already forces many companies to reduce production.
• Both the slowdown in demand and in production may shorten the life span of the "perfect storm," which has benefited semis up until this point.
• Semis, as a group, have factored in the impact from the chip shortage. Generally, semis with larger (smaller) chip supply exposures have underperformed (outperformed) the SOX Index.
• QCOM, NVDA, and AAPL have relatively overstated the chip shortage impact, while ADI, AVGO and ON have understated the chip impact.

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