This is textbook "bullwhip effect" stuff. Everyone was over-ordering because the leadtime was forever... now everyone's stuff is coming through and they're canceling because they don't need 5 years of supply delivered next week. Every layer of the supply chain (consumer products, product assembly, component procurement, shipping, component production, materials shipment, materials production, labor, etc) produces a stronger and stronger echo of its demand shocks on its suppliers, and then suddenly it stops and reverses and gluts just as strongly.

https://en.wikipedia.org/wiki/Bullwhip_effect

It has seemed like a definite possibility for a long time with the covid demand... let alone with the Fed actively trying to crush consumers until they can't afford to consume to produce a second-order effect of forcing corporations to halt their price-increase-spiral. Of course you can never predict the exact moment the flip will happen (and it happens progressively across the economy of course), it's the old "the market can remain irrational longer than you can remain solvent in a short position", but, yeah, I've been saying this for like a year now and I'm nobody particularly special in that respect.

Hopefully we will see microcontrollers/power+display ICs, Raspberry Pis, and [housing] building materials come down soon. Those have remained stubbornly short despite the glut in consumer-facing electronic products and leading-edge ICs.

Fab space is going to be another interesting one too, everyone was super hot on building their own fabs for those embedded things, and while I think there's a strategic interest in that continuing, there is going to be some tough times ahead for the commercial operators - especially TSMC, they are the one company where the margins have undeniably and conspicuously soared over the past few years.

You've already seen pullback in planned increases to DRAM and actual cuts to flash production... and I doubt there's any particular product that is going to surge and take up that capacity right now either.

> After analyzing 2023 supply and demand in the memory market, due to a conservative demand outlook, DRAM and NAND Flash look to be greatly oversupplied in each quarter and inventory pressure will continue to accelerate in 1H23. In the DRAM sector, after Micron led the way to announce a DRAM production reduction plan that will fall far below historical levels of supply-side bit growth, the 2023 DRAM Sufficiency Ratio will contract from the 11.6% previously forecast by TrendForce to less than 10%, helping to alleviate rapidly deteriorating inventory pressure. However, more suppliers must be relied on to join in the actual reduction of DRAM production in the future in order to reverse the supply and demand imbalance next year.

https://www.techpowerup.com/299555/micron-and-kioxia-are-cut...

> Kioxia Corporation announced production adjustments at its Yokkaichi and Kitakami flash memory plants. The company will reduce its wafer start production volume by approximately 30 percent, starting from October this year. By adjusting production in line with current market conditions, Kioxia will better manage production and sales. The company will continue to review and adjust operations as needed.

https://www.kioxia.com/en-jp/about/news/2022/20220930-1.html