NVDA
NVIDIA
-- 146.699 TSLA
Tesla
-- 422.685 NFLX
Netflix
-- 968.739 TEM
Tempus AI
-- 49.900 AAPL
Apple
-- 221.930 
$Direxion Daily Semiconductor Bear 3x Shares ETF (SOXS.US)$ ...
Why did the semiconductor boom happen? What will happen in the future?
Please read my opinion and use it as one of the judgment materials for investors
I posted it hoping you could get it![]()
When it comes to why the semiconductor boom is happening, many major IT companies are experiencing an AI boom
This is because they are getting on board and working on AI development. Semiconductors are essential for AI development, but high-performance GPUs (image processing semiconductors) are essential for particularly advanced AI development.
As AI development progresses, the supply of semiconductors will increase, so it is necessary to build semiconductor-related factories around the world. Since semiconductors are necessary for AI development, there are many orders placed with NVIDIA, but currently there are situations where supply is not on time, and competition with semiconductor companies such as AMD is intensifying in China, South Korea, Taiwan, Japan, etc.
As AI development progresses, the supply of semiconductors will increase, so it is necessary to build semiconductor-related factories around the world. Since semiconductors are necessary for AI development, there are many orders placed with NVIDIA, but currently there are situations where supply is not on time, and competition with semiconductor companies such as AMD is intensifying in China, South Korea, Taiwan, Japan, etc.
The construction of a semiconductor factory has also been decided in India![]()
If only semiconductor factories are built here and there, the possibility that the balance between supply and demand will be lost will increase.
India approves construction of 3 semiconductor plants at a total cost of 15.2 billion dollars
Currently, AI development is an upfront investment, so there is uncertainty. There was a problem with Google's generative AI the other day as well. AI is still imperfect, and further evolution and growth hold the key.
Currently, AI development is an upfront investment, so there is uncertainty. There was a problem with Google's generative AI the other day as well. AI is still imperfect, and further evolution and growth hold the key.
As for the news below, expectations have taken precedence, and AMD's stock price is at a level that cannot necessarily be said to be undervalued due to recent increases![]()
AMD's total market value has surpassed 300 billion dollars, and expectations for AI chips are a tailwind
AI is being developed all over the place, but I don't think everything will go well because expectations take precedence. Semiconductor companies should make semiconductors and sell them, so there's no risk and profit margins are high, but since supply cannot be made in time, factories are built. Countries such as Japan and the United States are issuing subsidies, and the country is boosting up investment. The American government is not favorable to NVIDIA. I think building a semiconductor factory in one's own country is an appropriate decision considering disputes, wars, the spread of COVID-19, etc., and geopolitical risks![]()
However, it is extremely expensive, and dealing with hazardous substances such as carbon dioxide and toxic gases is also the biggest issue in the future, and since manufacturing semiconductors and semiconductor materials is extremely costly, it will take 2 to 3 years for them to be profitable![]()
Since major IT companies develop AI, semiconductor companies make money, but if AI development is delayed or stalled here and there, orders will also decrease, and it will be a blow to semiconductor companies. Therefore, not only are we looking at the financial results of semiconductor companies such as NVIDIA, but the financial results of IT companies developing AI are the most important.
The financial results of IT companies are also good, and the American economy looks good, but there are points of uncertainty due to interest rate cuts and presidential elections. Mr. Trump doesn't place importance on Taiwan, so Taiwan built a factory in Japan, but since I'm concerned about China's response, I think there is a high risk that the situation in Taiwan will worsen![]()
AI is being developed all over the place, but I don't think everything will go well because expectations take precedence. Semiconductor companies should make semiconductors and sell them, so there's no risk and profit margins are high, but since supply cannot be made in time, factories are built. Countries such as Japan and the United States are issuing subsidies, and the country is boosting up investment. The American government is not favorable to NVIDIA. I think building a semiconductor factory in one's own country is an appropriate decision considering disputes, wars, the spread of COVID-19, etc., and geopolitical risks
However, it is extremely expensive, and dealing with hazardous substances such as carbon dioxide and toxic gases is also the biggest issue in the future, and since manufacturing semiconductors and semiconductor materials is extremely costly, it will take 2 to 3 years for them to be profitable
Since major IT companies develop AI, semiconductor companies make money, but if AI development is delayed or stalled here and there, orders will also decrease, and it will be a blow to semiconductor companies. Therefore, not only are we looking at the financial results of semiconductor companies such as NVIDIA, but the financial results of IT companies developing AI are the most important.
The financial results of IT companies are also good, and the American economy looks good, but there are points of uncertainty due to interest rate cuts and presidential elections. Mr. Trump doesn't place importance on Taiwan, so Taiwan built a factory in Japan, but since I'm concerned about China's response, I think there is a high risk that the situation in Taiwan will worsen
CEO Fan of NVIDIA has stated that “we will do our best to succeed in that market within the scope of China's export restrictions,” but it is conceivable that China will once again account for 20 to 25% of NVIDIA's sales for data centers![]()
In the news below, it is written that the Japanese semiconductor industry, which once experienced setbacks from its former glory, “I would like to hope that it will not choose the wrong path” while aiming for revival. 👇
If you think about neighboring countries, will it work? 👇
The American economy is strong, but I feel that the collapse of the interest rate policy, which has been raised to 5%, is right around the corner, and it is thought that side effects will begin to appear soon. If the economy deteriorates or the performance of major IT companies deteriorates, it will be a major blow to semiconductor companies. Therefore, the performance of IT companies and AI development companies surrounding semiconductors affects the performance of semiconductor companies![]()
Also, personnel reductions (restructuring) are being carried out at banks and major IT companies. It is thought that the fracture is occurring in an invisible place. I think the unemployment rate will rise in the future.
This is not just an American problem; Japanese semiconductor companies are also being hit.
Nikkei continues to be expensive, but it cannot be said that the economy has improved just because the semiconductor boom is driving it. What is actually driving the semiconductor boom is that I think upfront investment called AI is driving semiconductors![]()
Also, personnel reductions (restructuring) are being carried out at banks and major IT companies. It is thought that the fracture is occurring in an invisible place. I think the unemployment rate will rise in the future.
This is not just an American problem; Japanese semiconductor companies are also being hit.
Nikkei continues to be expensive, but it cannot be said that the economy has improved just because the semiconductor boom is driving it. What is actually driving the semiconductor boom is that I think upfront investment called AI is driving semiconductors
Semiconductors are benefiting from AI, so it's just called a semiconductor boom!
Artificial intelligence (AI) is half the way! Don't you think it's still a long way before it penetrates society?
There are many critics and analysts who have a sense of caution, and I think there are fewer people who are optimistic![]()
Bubbles and booms will burst and wither, and I think a transient boom is occurring.
History repeats itself. If you expand your field of view, you can see what you can't see![]()
There are many critics and analysts who have a sense of caution, and I think there are fewer people who are optimistic
Bubbles and booms will burst and wither, and I think a transient boom is occurring.
History repeats itself. If you expand your field of view, you can see what you can't see
SOXS is a 3x leveraged ETF, so there are rapid rises and falls, so as an investor
Please make a decision after having knowledge and understanding!
Currently, I feel that Bull is bullish and semiconductor strength until the end of next week![]()
It's a bit of a step backwards, but I think the biggest opportunity is after mid-March or May.
If I wanted to write it, I could still convey my opinion by several times, but I made it simple.
Thank you for reading this long article to the end.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Discussing
Trump 2.0 Era: What's the next opportunity in the markets?
▪️Could Trump's crypto policies potentially benefit the crypto market? ▪️Might his tariff policies have a positive effect on Chinese stocks
Michael McCarthy CCO
Jan 3 11:57
Ask a strategist - Trump's first day
ピンハネ OP : I'll take a bath and have dinner. See you later![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
はるはるらんど : Thanks for the detailed explanation!
阿利襪 : This is it![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Thank you so much for explaining!
お金が集まる口座 : As a matter of fact, it's Pinhane. Even though I'm an amateur, I have the same perception. You mean that semiconductors and AI cost too much, and there are also accuracy issues. What's more, is the AI world that good even though there is a possibility that it threatens human work and life? I have a question.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
木鶏 : It was a great learning experience
投資家T : Thank you, Mr. Pinhane, for your easy-to-understand explanation of opinion. It was very helpful.
I would like to continue investing in SOXS while watching developments not only in semiconductors, but also in the surrounding and affected fields.
182177489 : Thank you so much for teaching me so easy to understand!
おむすびちゃん : It's a learning experience![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Thank you for presenting your point of view in an easy-to-understand manner
I don't think that would be the case if I were told that semiconductors would continue to pull on like this, or rather, they have gone up too much and adjustments will be made somewhere.
I feel like if demand for AI subsides, it will naturally subside.
However, since semiconductors are now essential everywhere in our lives, I think it will be a long time before they become obsolete.