Industry Outlook
A report on its 2024 Outlook for the semiconductors and semiconductor equipment industry by a Cantor Fitzgerald analyst has brought to light the promising trends in semiconductor revenues and economic growth.
Semiconductor Revenue Trends
Analyst C.J. Muse’s analysis reveals that current semiconductor revenue figures are trailing below the GDP trend line, indicating a period of inventory digestion within the industry. However, this downturn is seen as setting the stage for a compelling resurgence in 2024.
Impact of Semiconductor Market
The semiconductor industry, which includes notable companies like AMD, ASML Holding, NVIDIA Corp, Western Digital Corp, and others, faced headwinds during the “semiconstrained” period from 2020 to 2022.
Market Recovery and Growth
Looking ahead, Muse sees the semiconductor sector poised for a noteworthy recovery, with a strong possibility of surpassing the GDP trend line. A longer-term perspective indicates that the rising silicon intensity could outpace the growth of global GDP. Semiconductors are positioned as a key driver of the digital age, with the concept of “Data as the new oil” taking center stage.
Positive Growth Outlook
The SOX index hit a low on Oct. 13, 2022, and has since risen by ~95%, hinting at another strong year for semiconductor stocks in 2024. Despite ongoing debates on market dynamics and potential Fed actions, the semiconductor revenue outlook remains highly positive.
Projections and Key Markets
Muse’s projections estimate an 18% growth in CY24, with potential risks pushing it beyond 20%. The most promising end markets are identified as AI (Compute & Networking) and Memory (DRAM and NAND), with a selective focus on System-on-Chip (SPE) companies as key players in these trends.
