The U.S.-China chip war continues to affect the global semiconductor industry and become a headwind for companies such as NVIDIA, but Citigroup believes that chip companies such as TSMC, Samsung Electronics, GF and Applied Materials can still benefit, and TSMC will remain the hegemon of wafer foundry.
TSMC's capital expenditure may fall to $28 billion to $30 billion next year, down 6 percent from this year, due to the fact that some of the process equipment can be shared, and part of the deferred budget will be used this year3% to 125%, which is likely to fall to a four-year low.
Citi analyst Dannery pointed out that these trends are driving a huge wave of investment in semiconductor equipment, adding about $100 billion to the efforts of the United States and Europe**, "In the field of semiconductor equipment, our first choice is ASML and Applied Materials, because both companies have a dominant position."
Citi is betting that its leadership in materials engineering will be maintained in the long term, while ASML, the Dutch leader in the field of micro-shadow equipment, is expected to benefit from the wave of factory construction by European chipmakers.
Citi believes that other chip companies that are expected to benefit include TSMC, Samsung Electronics and GF.
Taiwan's geopolitical concerns seem to be a headwind for TSMC, but we are confident that TSMC will still be the global foundry leader, "We also believe that TSMC can still rely on its manufacturing advantages to firmly dominate the foundry, so ** is still the first choice, but Samsung Electronics and GF are expected to benefit from the second foundry options outside of Taiwan."
Concern is that Intel is not included in Citi's beneficiary list.
Intel is expanding its foundry business to challenge TSMC and Samsung Electronics, but Citi's analyst team is sad about its outlook due to relative inexperience and economies of scale, "We don't think Intel's foundry ambitions will succeed, because Intel is significantly behind TSMC and has not yet proven to be a competitive foundry, and the analogue industry will also experience low growth because China will increase the proportion of domestic semiconductors as much as possible."