Are semiconductors entering the supercycle?
The semiconductor industry has a business cycle where boom and recession alternate in cycles of 3 to 4 years, and it is called the silicon cycle.
Figure 1 shows changes in the gain/fall rate of the SOX Index (Philadelphia Semiconductor Stock Index), which consists of major semiconductor stocks in the US, and the growth rate of global semiconductor sales growth (both compared to the same month last year), and it can be seen that these are generally linked. Semiconductor sales bottomed out at the beginning of 2023, and the growth rate is currently expanding.
As digitalization progresses, demand for semiconductors is expected to increase in a wide range of applications in the future. Recently, the practical application of generative AI has progressed rapidly, and demand will be boosted to further improve performance and improve data processing efficiency. Therefore, it has entered a “super cycle” where the boom in semiconductors continues longer than normal, and there is a possibility that stock prices of related stocks will rise over the medium to long term instead of the normal 3 to 4 year cycle.
Figure 1 shows changes in the gain/fall rate of the SOX Index (Philadelphia Semiconductor Stock Index), which consists of major semiconductor stocks in the US, and the growth rate of global semiconductor sales growth (both compared to the same month last year), and it can be seen that these are generally linked. Semiconductor sales bottomed out at the beginning of 2023, and the growth rate is currently expanding.
As digitalization progresses, demand for semiconductors is expected to increase in a wide range of applications in the future. Recently, the practical application of generative AI has progressed rapidly, and demand will be boosted to further improve performance and improve data processing efficiency. Therefore, it has entered a “super cycle” where the boom in semiconductors continues longer than normal, and there is a possibility that stock prices of related stocks will rise over the medium to long term instead of the normal 3 to 4 year cycle.
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