Global semiconductor sales are expected to grow by 11.2% in 2023, with a further 19% increase projected for 2024, driven by high demand for AI and data-heavy applications. Advanced node capacities (below 20nm) are estimated to expand by 12% with utilization rates above 90% in regions like Taiwan, the U.S., and South Korea. Despite a robust outlook, the industry faces challenges from geopolitical instability and U.S. tariffs that could disrupt supply chains and inflate prices.
Major companies like NVIDIA Corp. and Texas Instruments remain optimistic, with NVIDIA’s GPUs leading in AI workloads and Texas Instruments reshoring over 95% of its wafer production. The U.S. government is prioritizing onshoring semiconductor manufacturing to reduce dependence on China, as the market is projected to expand from $452 billion in 2021 to $803 billion by 2028. The Zacks Semiconductor – General industry currently holds a Zacks Industry Rank of #189, reflecting deteriorating near-term prospects amid these macroeconomic pressures.
Overall, while the industry’s long-term growth potential remains strong, short-term uncertainties from tariffs and geopolitical risks may impact stock valuations and consumer confidence.
