The semiconductor industry is poised for a promising comeback in 2024, following a challenging period marked by various setbacks. While semiconductor companies faced threats such as declining Chinese demand, export controls, inventory build-up, and sluggish sales of smartphones and computers, the tide seems to be turning. Taiwan Semiconductor Manufacturing Company (TSMC), a key player in the industry, has expressed cautious optimism regarding a rebound in demand.
TSMC, the largest global semiconductor manufacturer, recently reported strong fourth-quarter revenue, largely driven by sales of AI chips to prominent clients like Apple and Nvidia. Although the company experienced a 4.5% decline in annual revenues in 2023, attributed to a surplus in consumer electronics and capital expenditure moderation, it anticipates growth in 2024. TSMC expects this growth to be fueled by its high-performance computing segment and the increasing demand for AI chips.
This positive outlook is further supported by Jefferies analysts, who predict rapid growth in the semiconductor industry until the first half of 2025. They anticipate a 20% growth in 2024 and mid-teen growth in 2025. The resurgence of sales in segments like PCs and smartphones, along with a rise in memory pricing and strong AI demand, has contributed to this accelerated growth.
The projected upswing in the industry is also expected to boost the valuations of companies like Arm Holdings PLC, a fabless chip designer benefiting from the rebound in smartphone and Internet-of-Things device sales. Additionally, lithography machine manufacturer ASML is poised for a rebound once wafer fabrication equipment sales begin to rise again.
Looking ahead, major chip designers like Nvidia, AMD, Qualcomm, and Mediatek are set to explore the possibilities of two-nanometre wafer capacity in 2024. This advancement represents the next generation of cutting-edge chips. While the production of 2nm chips is not expected until 2025 or 2026, it aligns with the projected tail end of the next cyclical upswing.
Overall, a renewed sense of optimism has emerged in the semiconductor industry, fueled by the anticipation of growth in 2024. With promising developments on the horizon, the industry is primed for a resurgence that will elevate valuations and drive innovation in the coming years.
The source of the article is from the blog maltemoney.com.br