How everything is calculated

Every number on this site is derived from public data using transparent formulas. If you spot an error or want to reproduce a calculation, you have what you need.

Primer: the semiconductor industry in 90 seconds

Semiconductor companies don't all do the same thing. Knowing where a company sits in the value chain matters because each segment has different margins, cyclicality, and exposure to AI vs broader demand.

The value chain

Design software (EDA) — Synopsys (SNPS), Cadence (CDNS). Sells the tools every chip designer uses. Recurring revenue, very high margins, least cyclical part of the chain.

Chip design (fabless) — NVIDIA (NVDA), AMD, Broadcom (AVGO), Qualcomm (QCOM), Marvell (MRVL). Designs chips but outsources manufacturing. High margins, moderate-to-high cyclicality.

Manufacturing (foundry) — Taiwan Semiconductor (TSM), GlobalFoundries (GFS), United Microelectronics (UMC). Makes chips for everyone. Capital-heavy, huge fab investments, exposed to geopolitics.

Memory — Micron (MU), Samsung (005930.KS), SK Hynix (000660.KS), Western Digital (WDC), Kioxia (285A.T). Most cyclical part of the industry. DRAM/HBM tied to AI; NAND tied to PCs and phones.

Equipment (WFE) — ASML, Applied Materials (AMAT), Lam Research (LRCX), KLA (KLAC), Tokyo Electron (8035.T). Sells the machines that make chips. Leads the cycle by 6–12 months — when fabs order more equipment, more chips are coming.

Integrated device manufacturers (IDMs) — Texas Instruments (TXN), Analog Devices (ADI), NXP (NXPI), Infineon (IFX.DE). Design and manufacture their own chips. Most exposed to industrial, automotive, and broad-based demand — the opposite of the AI trade.

Why semis are cyclical

Building a fab takes 2–4 years and tens of billions of dollars. Demand can shift in months. So supply and demand rarely match: when chips are scarce, prices and earnings surge, capacity gets added; by the time that capacity comes online, demand has often cooled. Cycles tend to last 2–4 years peak-to-peak.

The implication: peak earnings often coincide with cycle tops, not bottoms. Stocks trading at the lowest P/E multiples can sometimes be the most expensive in absolute terms, because the "E" is unsustainable. This is the peak earnings trap, and it's why cycle-aware analysis matters.

What's different about today (mid-2026)

The current cycle is unusual. AI infrastructure demand has decoupled top-tier names (NVDA, AVGO, TSM, ASML, the HBM trio) from the broader cycle. Memory pricing, historically the most cyclical input, is now bifurcated — HBM is sold out into 2027 while NAND tracks a more conventional cycle. Inventory normalization has been uneven. Geopolitical risk (US–China export controls, tariffs) is structural, not transient.

That's the case for splitting sentiment into two parallel gauges. The old "single semi index" approach hides what is actually a two-track market.

Sentiment composite (v2)

Two parallel gauges score sentiment from 0 to 100 for two ticker groups. Same nine components, different baskets, so the gauges can diverge when the AI economy and the broad-based semi cycle move differently.

Ticker groups

Composite formula

The composite is 60% technical (price-driven, fast-moving) and 40% fundamental (slower-moving, regime-aware).

Why percentile rank for technicals

Distance-from-MA, RS-vs-SPY, and vol use percentile-rank rescaling against each gauge's trailing 252-day distribution. This makes the gauge self-calibrating: today's reading reflects "where this is vs. where it has been recently," which keeps the gauge useful in both quiet markets and supercycles. The pure-linear technicals (RSI, breadth) are already 0–100 by construction.

Why fundamentals at 40%

Pure-technical sentiment leads cycle peaks by zero days — by the time price momentum breaks, the move has happened. Fundamentals lead by months. Memory pricing, capex revisions, and EPS revisions all flag regime shifts before they show in the price tape.

The cost of including fundamentals: the composite moves more slowly. A pure-technical gauge can swing 10 points in a week; this one rarely moves more than 5. That's by design. We aren't trying to call short-term tops and bottoms.

Score interpretation

Cycle position (v2)

Estimates where the industry sits in its multi-year cycle. Independent from short-term sentiment. Now uses 4 live signals — 2 coincident, 2 forward-looking.

Signals

How forward signals work

Inventory days = (inventory dollars / quarterly revenue) × 91. We compute this for memory + IDM filers (MU, WDC, TXN, ADI, NXPI, ON, MCHP, INTC), then average across the universe. The cycle signal is the change in average inventory days over the trailing 4 quarters. Rising = oversupply building (bearish for prices, late-cycle). Falling = supply tightening (bullish, mid-cycle).

WFE capex YoY = sum of TTM capex across AMAT, LRCX, KLAC, TER, ONTO vs. prior TTM. Equipment makers spend capex to expand their own production capacity based on order book visibility, which leads chip company orders by 1–2 quarters. Surging WFE capex = they see more orders coming. Falling WFE capex = order pipeline thinning.

Zone interpretation

Memory pricing

Memory is the most cyclical sub-segment of semis and the most reliable leading indicator for the broader cycle. We track three categories:

• DRAM contract — high-volume server/PC memory. Direction reflects supply-demand balance for traditional computing.
• NAND flash — storage memory. Tied to PCs, smartphones, and enterprise SSD demand.
• HBM (high-bandwidth memory) — what AI accelerators use. Independent cycle from DRAM/NAND because supply is constrained by advanced packaging capacity.

Source: TrendForce press releases. We scrape the latest commentary and classify direction (rising / falling / flat) based on headline language. Falls back to a manually-curated file when the scrape fails.

Earnings revisions

Tracks net analyst rating changes (upgrades minus downgrades) over the trailing 30 and 90 days, per ticker. Aggregate breadth — what % of the universe has net up-revisions vs net down-revisions — is a stronger predictor of forward earnings momentum than absolute consensus levels.

Source: Finnhub upgrade/downgrade endpoint, daily refresh.

Movers and leaders

Four short lists from the 38-ticker universe:

• Top gainers / laggards — biggest one-day percent moves.
• Most extended — trading furthest above their 50-day MA. Momentum leaders with mean-reversion risk.
• Least extended — trading closest to or below their 50-day MA. Relatively cool names in an otherwise hot sector.

None are buy or sell signals. They surface where the action and the gaps are.

Data sources and refresh cadence

Known limitations

• SOX year-over-year reading is computed as today's 21-day median price vs. the 21-day median centered on the same date one calendar year ago. Other publishers may report different "1-year" figures using rolling, annualized, or total-return methodologies. Our number is honest about what it measures: literal price ratio, smoothed against single-day outliers. Not directly comparable to "1Y annualized return" elsewhere.
• EDGAR data has a structural lag: 10-Q filings drop ~45 days after quarter-end. So inventory-days direction reflects the most recent quarter where filings exist, not real-time inventory.
• The AI gauge contains 4 of the 5 largest semi names by market cap. When NVDA, AVGO, TSM, or ASML have large moves, the composite reflects that concentration. This is a feature for tracking AI infrastructure exposure, not a bug — but worth knowing.
• Foreign filers (TSM, ASML, Samsung, SK Hynix, Infineon, Tokyo Electron) report on different cadences (20-F annually) and are not included in our EDGAR aggregates. This means inventory days and capex YoY are US-filer subsets, not global.
• Korean and Japanese tickers report on a different trading calendar than US markets. The composite handles missing days gracefully but means weekend US data won't include Friday Asia moves.
• Policy timeline is manually maintained, with a target of adding new BIS rules within 1–2 days of release.
• Yahoo Finance chart API and TrendForce scraping are unofficial; both can break without notice.

This is not investment advice

Everything on this site is publicly available information processed through transparent formulas. None of it constitutes investment advice. The semiconductor sector is highly cyclical and individual stocks can move significantly on company-specific news. Always do your own research and consult a qualified financial advisor before making investment decisions.