4 Stocks to Watch on Steady Growth in Semiconductor Sales
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Over the past year, semiconductor sales have shown steady growth, primarily fueled by the optimism around artificial intelligence (AI), especially generative AI. Robust demand from a wide range of industries has significantly boosted revenues for the semiconductor sector in recent quarters.
The steady demand for semiconductors was a major driver of last year’s overall market rally.
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Given this scenario, it would be ideal to invest in semiconductor stocks, such as Taiwan Semiconductor Manufacturing Company Limited TSM, Texas Instruments TXN, ASML Holding N.V. ASML and Advanced Energy Industries, Inc. AEIS. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Semiconductor Market on the Rise
The Semiconductor Industry Association (SIA) reported that global chip sales jumped 2.5% sequentially in April, reaching $57 billion, up from $55.6 billion in March. Year over year, semiconductor sales jumped 22.7%. This marks the 11th straight month of year-over-year sales growth above 17%.
John Neuffer, SIA president and CEO, said, “Global semiconductor demand remains high, with first-quarter sales substantially outpacing the first quarter of last year. Year-to-year sales increased by more than 17% for the 11th consecutive month, driven by a year-to-year sales increase of roughly 45% in the Americas.”
Earlier in the year, monthly sales dipped slightly due to concerns over the impact of the budget-friendly Chinese AI platform DeepSeek on U.S. tech firms. However, those worries quickly faded as analysts concluded that the fears were exaggerated.
Positive Outlook for 2025 and Beyond
April’s strong numbers came after an impressive 2024, when global semiconductor sales reached $627.6 billion — a 19.1% jump from $526.8 billion in 2023. The final quarter of 2024 alone saw $170.9 billion in sales, up 17.1% from the same period a year earlier, and 3% higher than the previous quarter.
The steady rise in sales has been driven by robust demand for chips in data centers. Also, the memory chip market is helping boost sales. With ongoing AI investments by tech companies, industry experts expect demand to remain high, with the SIA forecasting continued double-digit growth in 2025.
The Semiconductor Industry Association (SIA) previously projected a double-digit growth in 2025, further boosting optimism about the sector’s ongoing expansion.
4 Semiconductor Stocks With Upside
Taiwan Semiconductor Manufacturing Company Limited
Taiwan Semiconductor Manufacturing Company Limited is the world's largest dedicated integrated circuit foundry. As a foundry, TSM manufactures ICs for its customers based on their proprietary IC designs using its advanced production processes. Taiwan Semiconductor Manufacturing Company Limited’s goal is to establish itself as one of the world's leading semiconductor companies by building upon the strengths that have made it the world's leading IC foundry.