JPM | APAC THEMATICS - The Semis Unwind... Technical, Positioning, EPS vs Price, Duration and Buyside bars... & 5x charts.

Research evidence excerpt

JPM | APAC THEMATICS - The Semis Unwind... Technical, Positioning, EPS vs Price, Duration and Buyside bars... & 5x charts.

Specialist Sales

APAC Specialist Sales J P M O R G A N

17 July 2026

JPM | APAC THEMATICS - The Semis Unwind… Technical,

Positioning, EPS vs Price, Duration and Buyside bars… & 5x

charts.

Matthew See

+852 2800 8889

matthew.see@jpmorgan.com

APAC Thematics focuses on key macro views, market debates, and favoured investment themes.

The semis sell-off continues… the SOX -5% overnight and now -19% from the June highs. This is not uncommon... over the

past 15 years there have been 17x drawdowns of 20%, so we should expect this to occur roughly once each year. Taking a

top-down view on the sector, 5x things to keep in mind:

(1) Technicals - History suggests you buy 20% SOX drawdowns - Looking at the 17x drawdowns of -20%… average

subsequent returns are +2% (next 5 days), +8% (next 20 days) and +11% (next 60 days). So history says to buy. But while

there might be some comfort in the average, 5x of those 17x episodes went on to see -30% declines (which today is

consistent with the SOX moving back to its 100 DMA).

(2) Positioning - HF exposure still elevated (less extreme in Asia) - Our prime team highlight flows in tech/semis have been

negative, but far off capitulation levels. Positioning levels are less extreme, but still high. For example, Asia Supply Chain

basket -0.6z past 20d and L/S positioning now 63%ile vs past 12m, and US Semis flows -1.1z past 20d and L/S positioning

now 96%ile vs past 12m.

(3) EPS vs Price - A disconnect has opened up - Semi-co earnings estimates continue to revise higher, with TSMC & ASML

both printing solid results and strong guidance. This is the main argument from the bulls to buy the dip today - that earnings