Semiconductor Revenue Set to Skyrocket in 2024, Surpassing GDP Growth
A recent report from Cantor Fitzgerald has shed light on the future outlook of the semiconductor industry, predicting a significant surge in revenue in 2024. According to analyst C.J. Muse, current semiconductor revenue figures are trailing behind the GDP trend line, indicating an ongoing inventory digestion within the industry. However, this dip is seen as a precursor to a remarkable resurgence in 2024.
The report focuses on several prominent semiconductor companies, including NVIDIA Corp, Western Digital Corp, ASML Holding NV, NXP Semiconductors NV, GlobalFoundries Inc, Micron Technology Inc, Advanced Micro Devices Inc, Marvell Technology Inc, Qualcomm Inc, Teradyne Inc, and Intel Corp.
Muse’s analysis highlights that semiconductor revenues faced challenges during the semiconstrained period between 2020 and 2022. However, higher Average Selling Prices (ASPs) played a crucial role in boosting performance during this difficult period. Nevertheless, the industry experienced a significant downturn in memory, which partially offset the overall performance.
Looking ahead, Muse anticipates a noteworthy recovery in the semiconductor sector, with a strong likelihood of it catching up to and surpassing the GDP trend line. Taking a longer-term perspective, the report suggests that the growth in silicon intensity could outpace the growth of global GDP. Semiconductors play a pivotal role in the creation, transmission, analysis, and storage of data, positioning the industry as a key driver of the digital age.
The concept of Data as the new oil takes center stage in this landscape, underlining the integral role of semiconductors in powering the digital realm. With the added momentum from the evolving landscape of Generative AI, the semiconductor sector remains exceptionally bullish.
Despite ongoing debates around a soft- versus hard-landing and potential actions from the Federal Reserve, the outlook for semiconductor revenue remains positive. Muse’s projections estimate an 18% growth in CY24, with potential risks pushing it beyond 20%.
The report identifies the most promising end markets as AI (Compute & Networking) and Memory (DRAM and NAND), with a particular focus on System-on-Chip (SPE) companies that play a crucial role in these trends.
In summary, the semiconductor industry is poised for a significant resurgence in 2024, surpassing GDP growth and riding the wave of increasing silicon intensity. With the crucial role of semiconductors in the digital age and the growing importance of data, the future looks bright for this sector. As we move further into the digital era, semiconductor companies are set to play a pivotal role in shaping our technological landscape.
(Note: This article was generated based on available information and does not constitute financial advice. Please do your own research and consult with a professional before making any investment decisions.)
