It is expected that data centers, fab equipment and smartphones may rebound in the second half of this year. (Image source: Adobe stock)
[Look at China, January 24, 2023](See China reporter Cheng Fan compiles a comprehensive report) Due to rising interest rates and broken supply chains, the global semiconductor industry in 2022 will experience an unprecedented terrible year. Although the overall outlook for this year will not be very optimistic, U.S. semiconductor stocks generally strengthened at the beginning of this week. Japan’s Mizuho Bank also listed Nvidia, Qualcomm and Broadcom as its top choices for the semiconductor industry in 2023.
According to Reuters, on January 23 (Monday), AMD rose more than 6%, Qualcomm rose more than 4%, TSMC and Micron both rose 3%. Barclays analysts also upgraded AMD stock to overweight from equal weight.
Mizuho analyst Vijay Rakesh (Vijay Rakesh) said that the inventory adjustment that occurred in 2022 may continue this year, but at least in the first half of the year, this adjustment may be “more moderate” than a year ago. The Wall Street Journal previously reported that global inventories of semiconductor chips hit record highs as demand slowed.
Some sectors are expected to rebound in the second half of the year, including gaming, data centers, as well as fab equipment and smartphones.
In the past 20 years, the semiconductor industry only declined continuously during the early 21st century and the financial crisis in 2008, and the average growth rate in other years was about 40%. At present, due to factors such as constant interest rate hikes and supply-demand imbalances in certain areas, the risks in the industry may not be reduced in the short term.
According to the Seeking Alpha investment research platform news, industry analysts believe that after research, in chip manufacturing equipment factories, data centers and GPUs (graphics processing units), electric vehicles and advanced driver assistance systems, as well as 5G and smartphones, etc. “In all fields, investors have opportunities. Still, the broader analog and memory chip market needs to be cautious, at least for now.
Benefiting from the rebound in the gaming industry, Nvidia and AMD will continue to develop strongly, especially in the second half of this year.
AMD plans to release a chip for artificial intelligence (AI) model training in the second half of the year in order to preempt rival Nvidia to occupy the market. According to the Wall Street Journal, the new chip MI300 is called “the world‘s first CPU (central processing unit) + GPU (graphics processing unit) integrated in a data center” for artificial intelligence acceleration.
According to Lisa Su, CEO and chairman of AMD, the chip can reduce the time for the inference modeling process from months to weeks. In this regard, market analysts said that the release of new products will help to reverse the decline of the industry.
In addition, due to the sluggish demand side, the smartphone business will decline in 2022. Although this phenomenon will still exist in the first half of this year, the decline will slow down. The “recovery” of smartphone demand will drive the growth of companies related to chips and processors, such as Qualcomm.
Industry analysts also pointed out that the days of smartphone inventory will peak in the first and second quarters of this year, and may continue into the third quarter.
Concerned about the auto manufacturing market, analysts said the supply chain for the analog chip market could experience problems this year before seeing strong growth in 2025. As a result, analog chipmakers such as Texas Instruments and NXP will have to come under pressure, while companies such as ON Semiconductor and Allegro MicroSystems will benefit.
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