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The semiconductor industry that suffered in 2023 is making a steady recovery this year. The Semiconductor Industry Association (SIA) said on Aug 5 that global semiconductor sales totaled $50.0 billion, up 1.7% month over month from May’s total of $49.1 billion.
Semiconductor Sales Rebound on Higher Demand
The report also mentioned that sales totaled $149.9 billion in the second quarter, reflecting an 18.3% year-over-year jump and a 6.5% rise from the first quarter.
Regionally, year-over-year semiconductor sales rose 42.8% in the Americas, followed by 21,6% in China and 12.7% in Asia Pacific/All Other regions.
The ongoing optimism surrounding artificial intelligence (AI) has been driving demand for semiconductors, which is boosting sales. A large number of companies have been aggressively spending on AI systems in their bid to leverage AI as part of their digital transformation efforts.
Also, generative AI is becoming the focus of several tech giants, who have been investing more in its development. This has been creating massive demand for generative AI chipsets.
According to the World Semiconductor Trade Statistics (WSTS), the semiconductor industry is projected to grow 16% in 2024, up from its previous forecast of 13.1%. Global semiconductor sales are projected to hit $611.2 billion this year.
Sales in the Americas are anticipated to lead with an estimated jump of more than 25% this year. Looking ahead to 2025, WSTS expects global sales to grow by 12.5%, reaching a total of $687.4 billion.
Our Choices
Given the promising future, it would be wise to invest in semiconductor stocks like Taiwan Semiconductor Manufacturing Company Limited TSM, RF Industries, Ltd. RFIL, Micron Technology, Inc. MU and Applied Materials, Inc. AMAT which investors can gain from in the near term.
Taiwan Semiconductor Manufacturing Company Limited is the world's largest dedicated integrated circuit foundry. As a foundry, TSM manufactures ICs for its customers based on their proprietary IC designs using its advanced production processes. Taiwan Semiconductor Manufacturing Company Limited’s goal is to establish itself as one of the world's leading semiconductor companies by building upon the strengths that have made it the leading IC foundry in the world.
Taiwan Semiconductor Manufacturing Company Limited’s expected earnings growth rate for the current year is 23%. The Zacks Consensus Estimate for current-year earnings has improved 4.3% over the past 60 days. TSM presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.