Semiconductor Industry Short Interest
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
The Semiconductor industry group has underperformed the U.S. market this year with both the VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX) down over -42% for the year versus the S&P 500 down -22.5% and Nasdaq down -31.7%. Semiconductors was the fifth most shorted group at the start of 2022 but due to the mark-to-market decline of the value of shares shorted and short covering it has dropped to the eleventh most shorted group. The decline in the value of its shares shorted has made it the fourth most profitable shorted industry group behind Software & Services, Media & Entertainment and Retailing.
Total short interest the industry group is now $35.03 billion, and the most shorted stocks are below.
Most Shorted Semiconductor Stocks (as of 10.21.22)
Name
Ticker
SI % Float
S3 SI % Float
Fee
Short Interest
NVIDIA CORP
NVDA
1.28%
1.27%
0.30%
$3,689,281,571
TEXAS INSTRUMENTS
TXN
1.91%
1.87%
0.30%
$2,653,691,108
BROADCOM INC
AVGO
1.31%
1.29%
0.30%
$2,322,012,955
ADVANCED MICRO DEVICES
AMD
1.98%
1.94%
0.30%
$1,817,234,720
INTEL CORP
INTC
1.60%
1.58%
0.30%
$1,709,894,134
MICRON TECHNOLOGY
MU
2.56%
2.50%
0.30%
$1,472,049,111
QUALCOMM INC
QCOM
1.09%
1.08%
0.30%
$1,383,919,160
TAIWAN SEMICONDUCTOR ADR
TSM
0.37%
0.37%
0.30%
$1,232,449,982
ON SEMICONDUCTOR
ON
4.61%
4.41%
0.30%
$1,204,474,405
ANALOG DEVICES INC
ADI
1.61%
1.58%
0.30%
$1,164,390,735
ENPHASE ENERGY
ENPH
3.31%
3.20%
0.30%
$1,059,174,405
WOLFSPEED INC
WOLF
7.33%
6.83%
0.30%
$937,586,890
GLOBALFOUNDRIES INC
GFS
24.92%
19.95%
4.32%
$893,650,856
APPLIED MATERIALS INC
AMAT
1.27%
1.25%
0.30%
$841,089,059
MICROCHIP TECH INC
MCHP
2.43%
2.37%
0.30%
$780,600,659
KLA CORP
KLAC
1.90%
1.87%
0.30%
$733,588,168
MONOLITHIC POWER SYSTEMS
MPWR
5.12%
4.87%
0.30%
$712,225,112
NXP SEMICONDUCTORS NV
NXPI
1.91%
1.87%
0.30%
$707,314,012
LAM RESEARCH CORP
LRCX
1.57%
1.54%
0.30%
$703,328,853
MARVELL TECHNOLOGY INC
MRVL
2.08%
2.04%
0.30%
$671,894,872
FIRST SOLAR INC
FSLR
4.73%
4.52%
0.30%
$574,203,380
ASML HOLDING NV ADR
ASML
0.24%
0.24%
0.30%
$415,651,541
ENTEGRIS INC
ENTG
3.61%
3.49%
0.30%
$408,985,677
UTD MICROELECT ADR
UMC
2.20%
2.15%
2.82%
$322,525,345
SKYWORKS SOLUTIONS
SWKS
2.41%
2.35%
0.30%
$314,333,644
Total Semiconductor Short Interest
-
3.33%
3.08%
0.48%
$35,032,163,404
While stock prices in the Semiconductors have been declining steadily in 2022, short sellers have been flip-flopping between short selling and short covering on a quarterly basis.
Semiconductor shorts were up 14% in the first quarter, but we saw $1.9 billion of short covering as they realized some of their mark-to-market profits.
Semiconductor Industry
12/31/2021 Short Interest
3/31/2022 Short Interest
Change Short Int
Change Shares Shorted
Change MTM
Semiconductor Equipment
$10,052,347,694
$8,473,940,431
($1,578,407,263)
($192,926,056)
($1,385,481,207)
Semiconductors
$48,509,780,541
$38,456,995,186
($10,052,785,355)
($1,742,877,863)
($8,309,907,492)
Semiconductors Total
$58,562,128,235
$46,930,935,616
($11,631,192,619)
($1,935,803,918)
($9,695,388,701)
In the second quarter we saw more severe market weakness in the sector, with short sellers up +30% for the quarter. There was a significant amount of short selling, $7.04 billion worth, as shorts backed up their bets in their profitable trades.
Semiconductor Industry
3/31/2022 Short Interest
6/30/2022 Short Interest
Change Short Int
Change Shares Shorted
Change MTM
Semiconductor Equipment
$8,473,940,431
$9,988,890,029
$1,514,949,598
$3,208,680,542
($1,693,730,944)
Semiconductors
$38,456,995,186
$31,510,704,711
($6,946,290,475)
$3,834,298,506
($10,780,588,981)
Semiconductors Total
$46,930,935,616
$41,499,594,740
($5,431,340,876)
$7,042,979,048
($12,474,319,924)
The third quarter saw $1.83 billion of short covering as the rate of price weakness in the sector slowed and short sellers were only up +5% from June to September. Shorts were trimming some of their sector exposure in anticipation of nearing a possible market floor.
Semiconductor Industry
6/30/2022 Short Interest
9/30/2022 Short Interest
Change Short Int
Change Shares Shorted
Change MTM
Semiconductor Equipment
$9,988,890,029
$7,086,998,468
($2,901,891,561)
($1,769,734,297)
($1,132,157,264)
Semiconductors
$31,510,704,711
$28,944,921,407
($2,565,783,304)
($62,486,986)
($2,503,296,318)
Semiconductors Total
$41,499,594,740
$36,031,919,875
($5,467,674,865)
($1,832,221,282)
($3,635,453,583)
October is seeing a return to increased short selling with $237 million of new short sales in October. Shorts are already up +3.3% in just a few weeks, and they are looking at macro, interest rate and regulatory pressure pushing Semiconductor stocks downward for the rest of 2022.
Semiconductor Industry
9/30/2022 Short Interest
10/19/2022 Short Interest
Change Short Int
Change Shares Shorted
Change MTM
Semiconductor Equipment
$7,086,998,468
$6,426,690,699
($660,307,769)
($133,788,626)
($526,519,143)
Semiconductors
$28,944,921,407
$28,605,472,705
($339,448,702)
$370,619,649
($710,068,351)
Semiconductors Total
$36,031,919,875
$35,032,163,404
($999,756,471)
$236,831,023
($1,236,587,494)
Shorting the Semiconductor industry has outperformed the market with short sellers up $24.5 billion in year-to-date mark-to-market profits, up 52.1% on an average short interest of $47.1 billion. Not only was the industry profitable on the short side as a whole, but the industry was also broadly profitable and there was no need to be a savvy short-side stock picker in order to bolster portfolio returns. 77% of all the stocks in the sector posted positive short-side returns and 95% of every dollar shorted made money.
The Most Profitable Semiconductor Shorts in 2022
Name
Ticker
Avg Fee
Avg Short Interest
YTD MTM P\L
P\L %
NVIDIA CORP
NVDA
0.30%
$5,572,676,905
$4,674,333,950
83.88%
ADVANCED MICRO DEVICES
AMD
0.30%
$4,104,361,796
$3,865,726,911
94.19%
INTEL CORP
INTC
0.30%
$2,572,485,135
$1,576,740,143
61.29%
BROADCOM INC
AVGO
0.30%
$2,748,050,669
$1,207,789,416
43.95%
QUALCOMM INC
QCOM
0.30%
$2,340,959,719
$1,079,342,352
46.11%
MICRON TECHNOLOGY
MU
0.30%
$1,829,206,636
$1,048,902,802
57.34%
TAIWAN SEMICONDUCTOR ADR
TSM
0.30%
$1,608,209,041
$930,139,255
57.84%
APPLIED MATERIALS INC
AMAT
0.30%
$1,225,038,996
$826,202,104
67.44%
MARVELL TECHNOLOGY INC
MRVL
0.30%
$938,331,523
$806,356,279
85.94%
LAM RESEARCH CORP
LRCX
0.30%
$898,799,731
$805,040,576
89.57%
And there were only five stocks with year-to-date mark-to-market losses over $10 million:
Semiconductor YTD MTM P\L
Ticker
Avg Fee
Avg Short Interest
YTD MTM P\L
P\L %
ENPHASE ENERGY
ENPH
0.30%
$864,219,924
($273,781,047)
-31.68%
FIRST SOLAR INC
FSLR
0.30%
$370,107,382
($133,556,359)
-36.09%
GLOBALFOUNDRIES INC
GFS
2.05%
$667,062,955
($87,439,996)
-13.11%
JINKOSOLAR HLDG CO ADR
JKS
0.59%
$167,808,187
($12,371,823)
-7.37%
DAQO NEW ENERGY CORP ADR
DQ
0.30%
$138,300,358
($11,351,514)
-8.21%
Most Profitable Shorts (YTD 10.21.22)
Name
Ticker
Avg Fee
Avg Short Interest
Oct MTM P\L
P\L %
ADVANCED MICRO DEVICES
AMD
0.30%
$1,926,957,405
$188,963,591
9.81%
ENPHASE ENERGY
ENPH
0.30%
$1,124,690,454
$147,619,529
13.13%
MONOLITHIC POWER SYSTEMS
MPWR
0.30%
$763,716,421
$112,166,330
14.69%
TAIWAN SEMICONDUCTOR ADR
TSM
0.30%
$1,284,896,212
$90,323,840
7.03%
KLA CORP
KLAC
0.30%
$847,892,180
$87,456,253
10.31%
Least Profitable Shorts (YTD 10.21.22)
Name
Ticker
Avg Fee
Avg Short Interest
Oct MTM P\L
P\L %
MICRON TECHNOLOGY
MU
0.30%
$1,466,687,294
($82,754,811)
-5.64%
GLOBALFOUNDRIES INC
GFS
4.32%
$739,745,715
($64,803,996)
-8.76%
ANALOG DEVICES INC
ADI
0.30%
$1,128,536,886
($17,690,633)
-1.57%
UTD MICROELECT ADR
UMC
3.33%
$311,228,284
($17,595,714)
-5.65%
AEHR TEST SYSTEMS
AEHR
1.06%
$50,575,270
($16,909,887)
-33.44%
There is only one Crowded short in the Semiconductor industry with GlobalFoundries Inc (GFS) scoring a 92.50\100.00 in our Crowded stock metric. It is the 13th largest short in the industry, with a 4.32% stock borrow fee versus the 0.71% fee market average, and S3 SI % Float as well as Days-To-Cover 4.5 times the market average. Atomera Inc (ATOM) has become slightly more crowded in 2022 climbing up from a 62.50 score in January but has remained in the 70’s since June. Stocks with Crowded score in the 50’s are more crowded than the average U.S. stock (32.60 average Crowded score) but only Indie Semi (INDI) and Navitas Semi (NVTS) have been trending upward over the last three months.
Most Crowded Semiconductor Shorts (as of 10.21.22)
Name
Ticker
S3 Crowded Score
GLOBALFOUNDRIES INC
GFS
92.50
ATOMERA INC
ATOM
70.00
INDIE SEMICONDUCTOR INC
INDI
55.00
NAVITAS SEMICONDUCTOR CORP
NVTS
55.00
KULICKE & SOFFA INDS
KLIC
52.50
HIMAX TECHNOLOGIES INC ADR
HIMX
50.00
We will see if October’s trend of increased short selling in the Semiconductor industry will continue through the 4th quarter but with both the SMH and SOXX semiconductor ETF’s already down almost -3.5% in October we should be seeing an increase in momentum and technical short selling in the industry in addition to the fundamental short selling we have seen in 2022.
Over the last month we have seen increased short selling in Monolithic Power Systems (MPWR), GlobalFoundries Inc (GFS), AML Holding NV ADR (ASML), Texas Instruments (TXN) and Analog Devices Inc (ADI). And increased short covering in KLA Corp (KLAC), Broadcom Inc (AVGO), Micron Technology (MU), Qualcomm Inc (QCOM) and Taiwan Semiconductor ADR (TSM).
