Semis Cycle 2026: The Three Charts I'm Watching

I've been overweight semis since 2024. The question I keep asking myself: am I still being paid for this exposure, or have I become an anchored bull?

These are the three charts I check every Monday.

1. TSMC monthly revenue (TWSE: 2330)

The single best leading indicator for hyperscaler capex digestion. Year-over-year growth has compressed from 60% in mid-2025 to roughly 24% as of last print. As long as it stays in the high teens or above, the cycle has room.

Invalidation: two consecutive months below +12% YoY with no obvious one-off (earthquake, holiday calendar).

2. WFE bookings vs. shipments at LRCX / AMAT

When the book-to-bill at wafer fab equipment vendors crosses below 1.0 for two quarters running, it has historically marked the top of the cycle. We're at 1.18 as of last quarter. Still safe — but the slope is what matters.

3. NVDA gross margin

Less about NVDA the company, more about the pricing power proxy. As long as GM stays above 73%, hyperscalers are still in a position where they want the chip more than the chip wants them. The day GM rolls to the high 60s is the day I trim aggressively.

What I'm doing about it

Nothing yet. The point of having a written invalidation condition is that you don't trade your gut feelings — you trade the conditions you wrote down when you weren't emotional. None of mine have triggered.

I'll log the next position-size change in the Decision Log. You can guess the URL.