AI Chip Boom Fuels Record Highs for US Chip Stocks
Thursday morning saw a surge in US chip stocks, driven by Taiwan Semiconductor Manufacturing Co’s (TSMC) optimistic sales forecast. The world’s largest contract chipmaker raised its annual revenue growth expectations, with AI chips set to account for a mid-teen percentage of its full-year revenue.
TSMC’s AI Chip Dominance
As the leading producer of advanced AI chips, TSMC’s forecast reinforced investor confidence in the chipmaking industry. Its market capitalization is poised to cross $1 trillion, with US-listed shares rising 7% in premarket trading.
Ripple Effect Across the Industry
The positive news had a ripple effect across the industry, with TSMC customers and rivals alike experiencing gains. Nvidia, a frontrunner in AI chips, saw its shares rise over 2%, while AMD, a smaller rival, also gained more than 2%. Other industry players, including Broadcom, Qualcomm, and Micron, rose between 1.5% and 3%.
Intel’s Comeback Bid
Even struggling chipmaker Intel saw its shares edge higher, as it continues to expand its chip fabrication facilities in an effort to challenge TSMC in advanced contract manufacturing. While analysts expect this undertaking to take years, Intel’s efforts are seen as a positive sign for the industry.
A Breath of Fresh Air
TSMC’s outlook offered some much-needed respite to investors, who had been spooked by deep forecast cuts from chipmaking equipment giant ASML. The news sparked fears of a slower-than-expected recovery in demand for semiconductors not used in AI.
The Semiconductor Boom Continues
This year has seen a significant surge in semiconductor stocks, with TSMC’s US-listed shares up over 80% and Nvidia rising over twofold. Investors have poured billions of dollars into the industry, driven by Wall Street’s booming picks-and-shovels trade. As the demand for AI chips continues to grow, it seems the semiconductor boom is far from over.
Leave a Reply