Reading Into the Semiconductor Short Interest

Breaking apart the short interest from a month to month basis can show some interesting insight into what industry insiders and some of the more aggressive "smart money" traders may be thinking.  Of course these can always be thrown off by mere hedging transactions and by options trading, but massive moves are usually viewed as more symptomatic than coincidental.  We decided to show these in millions of shares.

Ticker    Short Interest w/ Volume (million shares)
Stock    FEB07        MAR07
Applied Materials
AMAT    40.65        43.049       
KLA-Tencor
KLAC     8.404        18.77
Teradyne
TER        10.97        11.65
Novellus
NVLS     13.202        13.045
Xilinx
XLNX     11.585        24.123
Altera
ALTR     14.758        20.065
SanDisk
SNDK    18.034        21.379
LSI Logic
LSI         76.393        72.344
Intel
INTC      63.526        62.743
Advanced Micro
AMD       20.506        40.007
Texas Instruments
TXN        31.006        32.517
Broadcom
BRCM    17.107        17.750
Marvell Tech
MRVL     18.173        18.504

What is odd here is that out of the 13 go-to chip names only Novellus (NVLS), LSI Logic (LSI), and Intel (INTC) showed declines in their short interests from February to March.  Before viweing this as any exodus on behalf of the short sellers expecting a meteoric rise, the actual drop in the shares listed in the short interest is almost neglegible at only about 5 million shares total if you add up the drop in all 3 names. 

At the same time the NASDAQ 100 ETF (QQQQ) saw its short interest rise from 149.763 million shares up to 201.935 million shares.

Jon C. Ogg
March 27, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.