The Zhitong Finance App learned that Citibank believes that artificial intelligence (AI) continues to lead the development trend of the semiconductor industry, and the positive performance of companies such as Texas Instruments (TXN.US) in the simulation field indicates the recovery of this market segment.
As the demand for AI chips from government agencies, academic institutions, and large and small enterprises continues to rise, the market potential of AI chips is rapidly expanding. AMD (AMD.US) has raised its AI-related sales forecast for this year from $3.5 billion to $4 billion. Citibank analyst Christopher Danely (Christopher Danely) predicts that after the release of the June earnings report of Broadcom (AVGO.US), the AI sector will grow even stronger.
In the field of simulation, Danieli is optimistic about the future of Microchip Technology (MCHP.US) and Adeno (ADI.US). He pointed out that Microchip's order cancellations have stopped and pre-orders have picked up, so he expects Texas Instruments revenue guidance to increase 4% over the previous quarter.
Danieli said in an investor report that the simulation industry is expected to experience inventory replenishment in the second half of 2024, and Texas Instruments's performance guidance for the second quarter of 2024 is expected to rise.
Elsewhere in the semiconductor industry, Intel's (INTC.US) PC business has been impacted by implementation issues, while AMD is facing a seasonal decline. Danieli mentioned that the traditional data center market is currently affected by inventory adjustments and loss of AI market share.
Despite this, the market prospects for wireless devices and technology are promising, but the AI-driven upgrade cycle may take another year. Qualcomm's (QCOM.US) performance exceeded expectations, thanks in part to inventory replenishment in the mobile phone market.
Danieli believes that although the automotive and industrial markets are still weak, the most difficult period seems to be over. He expects total chip sales for the whole year to increase 11% year over year to reach 582.4 billion US dollars.
Danieli emphasized in the report that Citibank remains highly optimistic about the semiconductor industry and reiterated its preferred investment targets: in the AI field, including Micron Technology (MU.US), Nvidia (NVDA), AMD, Broadcom, and Maywell (MRVL.US); in the field of simulation, including Microchip Technology and Adderall; and in the field of equipment, including Fanglin Group (LRCX.US) and applied materials (AMAT.US).