Kimihiko commented on a stock · Aug 18, 2024 15:10

Are semiconductors entering a supercycle?

The semiconductor industry has a business cycle of 3 to 4 years, alternating between prosperity and recession, known as the Silicon Cycle.
Figure 1 shows the fluctuation rates of the SOX index (Philadelphia Semiconductor Stock Index) composed of major semiconductor stocks in the United States and the growth rate of global semiconductor revenue (both compared to the same month of the previous year), and it is generally understood that these are interrelated. Semiconductor revenue bottomed out at the beginning of 2023 and is currently in a stage of expanding growth.
With the advancement of digitalization, it is expected that the demand for semiconductors will increase in a wide range of applications in the future. Recently, the practical application of generated AI has been rapidly progressing, which is expected to boost demand for further performance improvements and data processing efficiency. As a result, the semiconductor prosperity may last longer than usual, entering a "super cycle," where the stock prices of related companies may rise on a medium to long-term basis rather than the usual 3 to 4-year cycle.