Semiconductor stocks are rolling over … again.

The Market Vectors Semiconductor ETF (NYSEARCA:SMH), which I called my favorite exchange-traded fund as recently as June, has plunged this month, from $109.73 on Labor Day to $106.30 as trade opened Sept. 7.

This is the fifth fall of the year for the index, which also fell hard in August, June, March and February. So far in 2017, however, it’s still up 4.3%.

That’s not terrible, but what analysts are calling a “chip plunge” is really a recent preference for consumer discretionary stocks. The Vanguard Consumer Discretionary ETF (NYSEARCA:VCR) is up 12.6% for the year, with most holdings in retailers and entertainment companies.

A balanced portfolio would have both these names, but it’s the performance of individual semiconductor stocks that has drawn the attention.

Semiconductor Stocks: Up Is Down

Companies that make the gear to make chips, like KLA Tencor (NASDAQ:KLAC), are down 8% since Aug. 31. Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD), which have been leading the sector this year, are both down for the week.

Most worryingly, Micron (NASDAQ:MU) is down over 15%, in just five trading sessions. At its Sept. 7 opening bid of $45.05, it was trading at just 4.5 times earnings, and its market cap of $51 billion is barely 2.5 times its 2017 sales of $20.3 billion.

The fall has accelerated as Micron admitted that prices on “flash memory” chips, known as NAND, fell during its most recent quarter, with Morgan Stanley saying Micron inventories are growing, and prices are deteriorating.

There’s nothing unusual about this. Memory prices are volatile, they’re commodities and as supply catches up with demand, prices fall. Micron had room to fall because its most recent quarters have been monsters, as demand from both cloud and device companies remained strong.

This decade has seen a secular change in memory, as chips are now preferred over disks for their durability, energy efficiency and faster response. The price difference between chips and disk memory have fallen to the point of irrelevance, so these advances have come to the fore. Even PCs aren’t shipping with hard drives anymore.

What’s Next

The main drivers of chip sales, however, remain the Cloud Czars. If they begin slowing their capital expenditures, semiconductor stocks will roll over. But there is no indication this is happening. Capital spending on cloud data centers was up 59% year-over-year in the second quarter, exceeding $25 billion.

If there is something to worry about, it is that Facebook (NASDAQ:FB) is pacing that growth, that its margins are falling as a result and that the social media space as a whole has rolled over, meaning there could be excess cloud capacity down the road.

Things are just going so well that anything less than great looks bad. We were at a market peak, so profit-taking and weakness should be expected.

The Bottom Line on Semiconductor Stocks

If you’re to see the present pause in chip stock prices as anything but a buying opportunity, you believe we’re entering a technology recession and that economic growth is about to slow dramatically.

What’s happening is that the social media crisis, the China trade “war,” and a global growth slowdown are making semiconductor stocks the “canary in the coal mine” for investors, since the use of chips in clouds and devices keep deflation and growth going.

Growth may pause. A recession may come. But chip makers have been expecting this.

Micron had $5.1 billion in cash on its books at the end of August, Nvidia $7 billion, while KLA Tencor had cash and securities worth $3 billion on its books in June. They’re ready for anything that comes.

If it comes … when it comes, buy with both hands, because they will come back. Not all the consumer discretionary stocks can say that.

Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he did not hold a position in any of the aforementioned securities.