If you are interested in the semiconductor industry, you will be familiar with the "Philadelphia Semiconductor Index".
The Philadelphia Semiconductor Index is designed to measure the performance of the 30 largest semiconductor companies listed in the United States. The full name of the Philadelphia Semiconductor Sector Index is PHLX Semiconductor Sector Index, or SOX for short.
In fact, Philadelphia is 2,907 miles away from Silicon Valley, the "mecca" of semiconductors. The reason why it is called the "Philadelphia Semiconductor Index" is because this index was compiled by the Philadelphia ** Exchange in 1993. Founded in 1790, the Philadelphia Exchange is the first exchange in the United States and the oldest in the United StatesIn 2007, Nasdaq acquired the Philadelphia Exchange for $52 million, now known as NASDAQ PHLX.
Here's a little bit of the history of the Philadelphia Exchange, which dates back to 1754, when more than 200 Philadelphia merchants invested £348 to create a venue called the "London Coffee House", which soon became the commercial center of Philadelphia. During the British occupation of Philadelphia, the "City Tavern" replaced the "London Coffee House" as the social and commercial center of Philadelphia, and was later renamed the "Merchant's Coffee House", which was the initial form of the Philadelphia ** Exchange. In 1790, ** brokers became independent from other merchants and formed the "Philadelphia Brokers Association", and in the same year, the ** Philadelphia Exchange was officially born. Over the next decade, the Philadelphia** Exchange witnessed Philadelphia's glory as the nation's capital, making it the nation's most important commercial and political center and the birthplace of many U.S. financial institutions.
The Philadelphia Semiconductor Index has recorded the U.S. semiconductor market for 31 years, and the Philadelphia Semiconductor Index is not only the vane of the U.S. semiconductor market, but also one of the important indicators of the global semiconductor market.
So which semiconductor companies are included in the 2024 Philadelphia Semiconductor Index?
An introduction to the constituent stocks of the Philadelphia Semiconductor Index.
Before presenting the 30 semiconductor companies, it is important to emphasize once again that the Philadelphia Semiconductor Index selects the 30 largest semiconductor companies listed in the United States. This concept means that some large semiconductor companies that are not listed in the United States will not appear in the index, and semiconductor companies will also be screened out or selected for this index because of their performance.
Not all semiconductor-related companies have a chance to be included in the Philadelphia Semiconductor Index, which has a rigorous set of criteria for selecting constituent stocks, including requirements for business, market capitalization, and**liquidity. The details are as follows:
Companies that must have a core focus on the design, distribution, manufacturing, or sale of semiconductors;
Must be listed on the NASDAQ, NYSE, NYSE American, or Chicago Board Options Exchange (CBOE) with a market capitalization of more than $100 million;
Have been trading on the market for at least 3 months;
At least 1,500,000 shares traded per month for 6 months;
The company's ** must be listed or eligible to list options on the U.S.-registered market;
The company cannot be in bankruptcy proceedings.
Philadelphia Semiconductor Index (information as of January 31, 2024).
It is not difficult to find that in fact, the top semiconductor companies are basically included in the Philadelphia Semiconductor Index. However, there are several major semiconductor manufacturers that are not included in the index, such as Samsung, SK hynix, Apple, and MediaTek. Combined with the above description, Samsung, SK hynix, and MediaTek are semiconductor companies that are not listed in the United States; Although Apple has its own chips, it does not operate with this as its core business, nor is it within the scope of the Philadelphia Semiconductor Index calculation.
Statistics on the number of semiconductor companies in the Philadelphia Semiconductor Index, and statistics on the semiconductor industry.
From this **, it can be seen that the top 30 semiconductor companies listed in the United States are still design companies, and IDM and semiconductor equipment companies are listed as the first.
II. Third. Among them, ON Semiconductor announced in 2021 that the company will switch from IDM to FAB-LITE. In addition, although there are two semiconductor manufacturing companies listed in the United States, selling chips is not a core business, so it is not included in the Philadelphia Semiconductor Index.
What's next for the 2024 Philadelphia Semiconductor Index?
AI continues to benefit IC design companies.
An analysis of the data of 30 companies in the Philadelphia Semiconductor Index shows that design companies are still the "main force" of American semiconductor companies, both in terms of number and substance. This situation also reflects the industry pattern of the U.S. semiconductor industry, which is dominated by the design industry. Of course, the market value of design companies can be unbeatable and Nvidia's soaring market value in 2023 is not unrelated. In 2024, AI is expected to continue to bring growth opportunities for IC design companies.
Comparison of the market capitalization of the four types of companies in the Philadelphia Semiconductor Index, collation: the semiconductor industry is vertical.
The popularity of ChatGPT has brought about the prosperity of AIGC, and the force behind it is the rapid development of large model technology. The size of AI model parameters continues to increase around the world, from tens of millions to hundreds of billions. Such a hot demand is expected to continue in 2024, after all, the recent news that OpenAI wants to make cores has been reported repeatedly, which is enough to see that the demand for AIGC is still strong, and the product sales of related chips such as Nvidia and Broadcom are expected to continue to flourish in 2024.
In addition, in terms of consumer electronics, both PC manufacturers and mobile phone manufacturers have put forward the concept of "AI+" in the new products at the end of the year. With the AI capabilities of edge devices, consumer electronic devices may also usher in a recovery. Then related companies such as Intel, AMD, Qualcomm, etc. are expected to be helped in 2024.
Automotive chips: there are joys and sorrows.
Compared with the large-scale core shortage in the previous two years, the recent cold wave of demand for electric vehicles has spread to upstream component manufacturers. Texas Instruments, an analog chip giant that is regarded as a "barometer", disclosed its fourth-quarter earnings report, which fell short of market expectations. In its Q4 2023 and full-year earnings report**, STMicroelectronics warned of further weakness in automotive and industrial demand. As early as Q3 2023, Onsemi had raised at the first meeting that European Tier 1 customers are dealing with inventory, and the risk of car demand is increasing due to high interest rates.
The year 2023 has witnessed a boom in electric vehicles, especially domestic ones. However, since 2024, the market** has indicated that the growth rate of electric vehicles may slow down in 2024. At the same time, the pace of layout of electric vehicle companies in Europe and the United States has slowed down recently, and the market development has flattened. According to the latest statistics from Sigmaintell, the performance of automotive MCUs and storage markets fluctuates.
In terms of automotive MCUs, the lead time of automotive MCUs such as NXP, Cypress, Renesas, and STMicroelectronics is currently more than 30 weeks, but the absolute demand for automotive MCUs is still rising. In 2023, vehicle gauge storage will decline as a whole in H1**, and H2 will begin to stabilize, with a smaller change than that of consumer electronics. According to Micron's official statement, the automotive storage market will increase from $4 billion in 2021 to $10 billion in 2025, with a compound growth rate of 28%. By 2025, vehicles will be equipped with 16GB of DRAM and 204GB NAND, which are three times and four times higher than 2021 levels, respectively.
In addition, smart cars and robotaxis have given rise to the demand for autonomous driving, which requires a lot of computing power and massive production software expertise. The capability building and technological innovation of autonomous driving involve every link from the car to the cloud, including raw data collection and verification, scene library construction, map construction, neural network construction and training, and other modules. Developing autonomous vehicles requires a high-performance, energy-efficient AI computing infrastructure. The more information a car can collect and process, the faster and better AI can learn and make decisions. In the future, automobile-based scenarios will generate massive amounts of data, which will require cloud AI training as support. Garner estimates that each self-driving connected vehicle generates at least 4 terabytes of data per day. As industry benchmarks, Tesla and NVIDIA have both established autonomous driving network platforms that cover the vehicle-end cloud. Therefore, the automobile track will also have a beneficial impact on companies related to computing power chips.
Semiconductor equipment: may be affected by the U.S. ban.
Compared with the above two tracks, semiconductor equipment, as a link that has attracted much attention recently, seems to be a little difficult in 2024. On January 29, 2024, a spokesperson for Teradyne, a leading semiconductor automatic test equipment company, said on January 29 that Teradyne withdrew about $1 billion worth of manufacturing from China last year after U.S. export regulations caused a disruption in the ** chain. Brian Amero, Teradyne's global head of compliance and ethics, spoke at a virtual export conference about the company's decision to pull manufacturing operations out of China. Speaking at the Massachusetts Export Center's annual export expo, "We produce in China, so we have to get emergency authorization to continue producing. We thought it was too risky, so we moved our manufacturing out of China, and it was not cheap. ”
Amelo said that despite the authorization, some ** merchants still do not ship to the company, resulting in the ** chain disruption. The company reported that it was finally granted permission to mitigate the impact of the regulations, and when the U.S. updated its rules in October 2023, it made exceptions for test equipment used after wafer fabrication.
He said that while Teradyne was not a "direct target" of the export control rules, the company was "materially affected by them." We see this in market share."
In fact, Massachusetts-based Teradyne moved its production out of China after the U.S. enacted regulations in October 2022 restricting the export of semiconductor manufacturing. Teradyne said at the time that the restrictions affected both Teradyne's sales to certain companies in China and its manufacturing and development operations. In the three months ended October 1, 2023, the Chinese market accounted for 12% of Teradyne's revenue, down from 16% in the year-ago quarter.
In the Philadelphia Semiconductor Index, the products of ASML, another important semiconductor equipment company, are also confirmed to be affected in China** in 2024. On January 24, ASML released its fourth quarter and full year 2023 financial results. For the full year 2023, ASML achieved net sales of €27.6 billion, up 30% year-on-year. Among them, the Chinese market accounted for 29% of its lithography system sales, up from 14% in the previous year. ASML CFO Roger Dassen said on the same day that the performance of the Chinese market in 2023 was very strong, but most of the equipment delivered was based on orders placed in 2022 or even earlier. He expects sales in China to be affected by 10 to 15 percent in 2024 after the latest export control regulations issued by the Netherlands and the United States come into effect.
Summary. In 2023, the global semiconductor market has gone through a rollercoaster ride. How will the global economic recovery in 2024 affect the demand in the semiconductor market? How does the investment and policy support of each country** in the field of semiconductors have an impact on the semiconductor market? Can the semiconductor industry usher in new technological innovations and breakthroughs?
The uncertainty of the market still exists, and the challenges can only be met in the face of the unknown.