There is evidence that the stimulus cheques sent to US households, as part of the new administration’s fiscal expansion, have been spent disproportionately on durable goods (as one might expect of any one-off source of income). The semiconductor sector may represent the starkest example of this collision between stronger demand and weaker supply. Chart 12, for example, plots shipments of PCs by the major five global producers against exports of semiconductor components from Japan. The first rose significantly through the course of last year, boosted by the general shift away from consumer services to goods, and in particular the necessity of working more from home and, for firms, of moving activity online. But semiconductor production contracted in Japan and other major producing countries through the latter part of last year and the result was a marked drawdown in inventories and a sharp rise in prices. Chart 12: Demand for PCs rose steeply last year but supply of components declined  Source: Goldman Sachs, see Goldman Sachs (2021, see footnote 6) for further detail. Changes on a year ago. Semiconductor components include wafers, flash memory and DRAM memory, weighted by 2017 shipment values.
As the Swiss economy is on the upswing, income is rising, as are the prices of assets. Demographic changes could also add to the pressure. For instance, immigration of well-qualified persons with high purchasing power has increased quite steeply since the agreement on the free movement of persons entered into force almost five years ago. These factors all tend to drive up demand for residential space. So far, supply has been able to keep pace with the increasing demand. Nevertheless, with supply adjusting only slowly, a higher level of demand could well accelerate price increases in the real estate market. It would then be the SNB’s responsibility to ensure – under these more difficult circumstances – that price movements in the real estate market did not threaten price stability as a whole. BIS Review 11/2007  1