AMD and NVIDIA in semiconductor industry
Advanced Micro Devices (AMD) and NVIDIA (NVDA) have been the top semiconductor stocks (SMH) that have taken the market by storm over the last 18 months. While NVIDIA is growing due to the increasing adoption of AI (artificial intelligence), AMD is growing because of its re-entry into the already established CPU (central processing unit) and GPU (graphics processing unit) markets.
AMD is looking to grow by gaining market share in the PC (personal computer) and server processor markets, which are currently dominated by Intel (INTC). On the other hand, Intel is shifting focus away from PC and traditional server processors towards AI and automotive markets currently dominated by NVIDIA.
Global semiconductor revenue crosses $100 billion in 2Q17
All three companies are likely to grow in 2017 and beyond as the global semiconductor market revives. According to data from IHS Markit, the global semiconductor industry’s quarterly revenue crossed $100 billion for the first time in 2Q17. The industry’s revenue rose 6.1% sequentially, the highest second quarter growth the industry has witnessed since 2014. This growth was largely driven by strong revenue from AMD and NVIDIA. The industry also saw strong growth in memory chips where demand exceeded supply.
This growth trend is likely to continue through the rest of 2017. WSTS (World Semiconductor Trade Statistics) expects the worldwide semiconductor market to rise 17% YoY (year-over-year) in 2017 after growing 1.1% in 2016. WSTS keeps revising its forecast on a quarterly basis depending on the changing market environment. It revised its 2017 growth estimate from 2% in 2Q16 to 17% in 2Q17 and its 2018 growth estimate from 2.2% to 4.3%.