Semiconductor Industry Investment Map: Opportunities in Taiwan and Global Chip Stocks in 2024

Viewing New Investment Opportunities Through the “New Oil”

As the “brain” of electronic technology, semiconductors play an indispensable role in the global digital economy wave. Compared to traditional electronic products’ passive operation, modern semiconductors endow various devices with intelligent vitality—whether it’s Industry 4.0, cloud computing, 5G technology, new energy vehicles, or even the recently popular ChatGPT-driven generative AI—all continuously expanding the application boundaries of chips.

This diversification and sustained growth in demand provide new opportunities for precise selection of semiconductor investment targets.

The Investment Logic Brought by Industry Segmentation

Modern semiconductors have broken through traditional vertical integration models and evolved into a specialized division system:

Chip Design (Fabless) includes Qualcomm(QCOM), Broadcom(AVGO), NVIDIA(NVDA), etc., with advantages of light assets and low operating costs, but they must bear market volatility risks.

Foundry (Wafer Manufacturing) represented by TSMC(TSM) and GFS(GFS) requires continuous massive investments to maintain process leadership, generally presenting an oligopoly pattern.

Semiconductor Equipment and Materials Suppliers include Applied Materials(AMAT), ASML(ASML), Lam Research(LRCX), facing highly capital-intensive and volatile risks.

Within this segmentation system, chip design, foundry, and equipment sectors, due to their “long slope and thick snow” characteristics, have become key focus areas for current investors.

Leading Chip Design Companies: Companies Leading the AI Wave

NVIDIA(NVDA): Leader in the AI Chip Era

NVDA.US has already surged 77% this year, becoming the most dazzling investment target in the market. With GPU technology advantages, NVIDIA holds an absolute lead in the generative AI wave. Market forecasts predict global GPU demand will reach 30,000 units, and NVIDIA’s advantage in this field is unmatched. Despite the huge stock price increase, investors should still pay attention to risk management.

Qualcomm(QCOM): Core Support for 5G and IoT

As a global leader in wireless technology innovation, QCOM.US holds 53% of the 5G baseband chip market share. The company’s target market is expected to grow from the current $100 billion to $700 billion by 2030, with emerging fields like AR/VR, vehicle networking, and industrial IoT continuing to contribute growth momentum.

Broadcom(AVGO): The Hidden Champion in Communication Chips

AVGO.US has risen 21% this year to $1,344, with business covering data center networks, enterprise applications, smartphone components, etc. Through continuous acquisitions to expand product lines, Broadcom has established a monopoly position in niche areas, and investments in AI and 5G will further boost its performance.

Advanced Micro Devices(AMD): Challenger in Server Chips

AMD.US has gradually eaten into market share through deepening cooperation with tech giants like Microsoft and Apple in recent years. Its stock price has increased 7% to $157 this year. With 7nm and more advanced processes, the company is expected to further expand its global market share in the future.

Foundry and Equipment: Another Investment Mainline

Taiwan’s Leading Wafer Foundry(TSM): The Hub of Global Chip Manufacturing

As the world’s largest chip foundry, TSMC’s market value this year reached $717.2 billion, with a PE of 27.3 and a dividend yield of 1.6%. Among Taiwanese semiconductor stocks, TSMC represents the paradigm of capital-intensive enterprises—requiring continuous investment to maintain process leadership while controlling the global chip manufacturing lifeline.

ASML(ASML): The Lithography Equipment Monopoly

ASML.US’s stock price increased 22% this year, being the only supplier of EUV lithography machines worldwide. Deep cooperation with chip manufacturers like Samsung, TSMC, and Intel secures its monopoly position, which determines its long-term investment value—industry demand continues, meaning only ASML can do this business.

Applied Materials(AMAT): The Versatile Semiconductor Equipment Provider

AMAT.US’s stock price grew 26% last year to $203, with a PE of 23.93, making it the largest global supplier of semiconductor manufacturing equipment. Its high-efficiency, cost-effective solutions will continue to benefit from demand in flat panel displays, solar photovoltaics, 5G, IoT, AI, and other fields.

Lam Research(LRCX): Key Supplier of Etching Equipment

LRCX.US’s stock price rose 18.4% this year to $925, with a PE of 34. Although at a high valuation, the increasing requirements for deposition, etching, and cleaning processes in AI chip manufacturing suggest further upside potential. During market corrections, consider buying on dips.

Turning Points and Risks in Traditional Chip Manufacturing

Texas Instruments(TXN): The Moat of Analog Chips

TXN.US’s stock price increased 5% this year to a PE of 27. As the world’s largest analog semiconductor manufacturer, its products are difficult to replace and surpass, providing natural protection. Its rich product portfolio, strong sales network, decades of R&D accumulation, and global capacity build a formidable competitive advantage for Texas Instruments.

Intel(INTC): Challenges and Opportunities for the PC Chip Veteran

INTC.US’s stock price fell 36% this year to $31.88, with a PE of 32.87, making it the only declining leader. The fundamental reason is the lack of customers for new wafer foundries, and the self-produced and self-sold model is hard to profit from; high R&D investment has yet to yield returns. However, this also presents a hidden buying opportunity—if “overtaking on the bend” succeeds, the company’s growth prospects will be revalued. Development of smart cars and a rebound in the PC market will inject new vitality.

Micron Technology(MU): The Resurgence Star of Storage Chips

MU.US has increased 34.7% this year, holding 22.52% of the DRAM market share (third place) and 11.6% of NAND flash memory (fourth place). Although last year’s performance was impacted, as market demand recovers, the company is expected to enter a period of aggressive growth.

Market Cycles and Timing of Layout

The semiconductor industry exhibits a 4-5 year cycle. The current cycle started in the second half of 2019, peaked in October 2021 due to global chip shortages, and is expected to bottom out in Q3-Q4 of this year. Capital usually reacts about half a year in advance.

This means now is the window for gradually deploying semiconductor investments, reserving positions for the next rebound. Upstream raw materials have shown signs of bottoming out. Although consumer electronics demand remains weak, emerging fields like 5G and AI will continue to drive demand.

Three Major Factors Influencing Stock Price Trends

Changes in downstream demand structure: Expansion from traditional PCs and mobile phones to IoT, 5G communications, AI, and automotive electronics. In 2023, 5G terminal shipments are expected to reach 1.48 billion units, IoT devices will grow 38.5% year-over-year, and automotive electronics will grow 35.1% year-over-year. These new demands will be the engine for stock price increases.

Significance of inventory levels: Global semiconductor inventory directly reflects supply and demand. High inventory indicates weak demand or oversupply, putting pressure on stock prices; low inventory indicates strong demand or gaps, signaling a positive outlook.

Technological innovation creating competitive advantages: Diversification and specialization of AI chips, capacity and yield improvements in EUV lithography, and other technological breakthroughs are pushing related companies’ stock prices to new heights.

Risks Investors Need to Beware Of

Macroeconomic uncertainties: Interest rate hikes and banking system risks may cause unpredictable impacts on chip companies; continuous monitoring of Federal Reserve policies is necessary.

Intensified technological competition: Lagging in design, process, or packaging technology can lead to rapid market share and stock price adjustments. R&D investment and innovation capacity determine long-term competitiveness.

Uncertainty in end-demand recovery: When consumer electronics, smartphones, and PCs will rebound remains uncertain. The sustainability of data center cloud computing demand and AI computing power growth needs further verification.

In this complex market environment, accurately identifying industry prospects, key companies, and appropriate timing for deployment is essential to capturing investment opportunities in semiconductors.