U.S. chip stocks, including Nvidia and AMD, had their best annual performance since 2009. In 2023, the semiconductor sector experienced significant growth, with companies like Nvidia and AMD contributing to the industry’s positive performance. However, the sector also faced challenges such as supply chain issues and high inventories. The performance of semiconductor stocks can impact the broader market, and investors are closely monitoring the sector’s growth and potential challenges. According to reports, the good performance is partly due to its benefits from AI.
U.S. chip stocks soar
This year, the Philadelphia Semiconductor Index is undoubtedly one of the brightest stars in the U.S. stock market. It recorded a full-year increase of 65%, the largest annual increase since the financial crisis in 2009. At that time, the index soared 70%. Although it closed down 0.8% on Friday, it was still close to all-time highs.
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Among the 30 constituent stocks, except for Wolfspeed Corporation, the remaining 29 companies will see their share prices rise in 2023. Among them, Nvidia is undoubtedly the most dazzling star, with its stock price rising by more than 200%. This makes it the first chip manufacturer with a market value exceeding one trillion US dollars. AMD, another AI chip giant, has also surged nearly 130% this year.
Wolfspeed Corp. was the only chip stock to underperform, with shares down 37% for the year. The company, which makes power modules for electric vehicles, has issued two disappointing earnings forecasts this year. This is mostly due to the ongoing production problems at a new factory.
It is worth mentioning that chip design company ARM went public in September this year. Its initial performance was volatile, but then rebounded strongly, with a cumulative increase of nearly 60% since the October low. Looking to the future, with the rapid development of emerging technologies such as artificial intelligence and electric vehicles, and the gradual recovery of the global supply chain, the chip industry is still expected to maintain strong growth momentum.
