If you are looking for an investment bet for 2010, may be it is worth looking at the semiconductor industry.
The industry entered the 2008/9 downturn with far more chip inventory than was healthy.
The pain of the last 12 months has flushed this out of the market and now the chip industry enters 2010 with historically low levels of inventory in the supply chain.
Demand for silicon from the mobile, consumer and industrial sectors is starting to ramp.
Experience tells us that a declining inventory-to-sales ratio means the chip industry is on the verge of a boom.
Inevitably lead times on the most popular products are lengthening to 20 weeks and beyond.
Top of the list is memory - SRAM and NAND flash - with the availability of logic, DSP and MCUs now coming under pressure.
The result is that the stock market analysts have woken up to the situation in the semiconductor industry and have started marking up share prices.
But don't wait too long to pile in. The Q4 reporting season is upon us and with the numbers expected to be good, the cost of entry could be about to rise.
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