1 Monster Opportunity in the Global Chip Shortage
The semiconductor industry took a hit in 2023 thanks to a decline in sales of personal computers (PCs) and smartphones. The industry's revenue dropped 12% last year according to estimates. The sales drop also hurt the demand for semiconductor manufacturing equipment as foundries and chipmakers reduced orders for new equipment and focused on lowering elevated inventory levels. Spending on semiconductor fabrication equipment fell an estimated 15% in 2023, according to industry association SEMI. The drop explains why semiconductor equipment giant ASML (NASDAQ: ASML) issued a cloudy forecast for 2024 as order inflows slowed down.
Despite the gloomy forecast, there are signs of clearing skies in the new year that could help ASML deliver stronger-than-expected growth. Here's what's going on.
Market research firm IDC expects the semiconductor industry's revenue to increase by at least 20% in 2024. Also, SEMI anticipates a 15% increase in semiconductor equipment spending this year, which is not surprising as demand is expected to return in key markets such as PCs and smartphones. At the same time, the semiconductor industry is getting a major boost from artificial intelligence (AI), as the demand for chips deployed in AI servers is going through the roof.
Source Fool.com
