(Bloomberg) -- There’s a growing divide in the $530 billion semiconductor industry between the companies that are riding the artificial intelligence wave and...
-- There’s a growing divide in the $530 billion semiconductor industry between the companies that are riding the artificial intelligence wave and those that aren’t. And looking at the early returns from this earnings season, that gulf could soon widen into an abyss.One City’s Plan to Re-Link a Neighborhood That Robert Moses Divided
Taiwan Semiconductor Manufacturing Co., which includes Apple Inc. and Nvidia Corp. among its customers, assuaged some of those fears after lifting its revenue forecast for 2024. While its growth is being fueled by AI-related drivers, overall chip demand has “stabilized” and is starting to improve, Chief Executive Officer C.C. Wei said.
In addition, Intel Corp. is cutting costs and delaying new factories as it grapples with falling sales and mounting losses. Samsung Electronics Co. apologized to investors this month after delays in high-bandwidth memory chips led to disappointing financial results. And investors will be monitoring Texas Instruments Inc. this week, with its earnings due on Tuesday, since the company’s analog chips are used by a wide range of customers.
“We have been more cautious on other semi equipment names,” CJ Muse, an analyst at Cantor Fitzgerald, wrote in a research note. “But had thought a longer lead time player like ASML would outperform. Clearly we were wrong with this assumption.”Investors will get more insight this week when chip equipment maker Lam Research reports on Oct. 23. KLA is due to release results on Oct. 30, followed by Applied Materials on Nov. 14.
The chief beneficiary from all the spending is Nvidia, whose chips dominate the market for AI accelerators. The stock hit a fresh record last week after assurances from Chief Executive Officer Jensen Huang that its new Blackwell chip is in full production and seeing strong demand from customers. Nvidia shares are up more than 175% in 2024 and within striking distance of overtaking Apple as the world’s most valuable company with a market value of nearly $3.4 trillion.
“There will eventually be a value case to be made for non-AI chipmakers and a point when a strengthening economy means demand flips back,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder. “However, it’s a question of timing. AI will remain a focus in the meantime.”She gained an audience of millions by documenting the suffering in Gaza on Instagram. Now Israel’s wars are upending her life again, Richard Hall writes.
Semiconductor Industry ASML Lam Research Equipment Makers Nvidia Corp Christophe Fouquet Equipment Maker Taiwan Semiconductor Manufacturing Co. Marvell Technology Inc.
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