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Goldman Sachs reported insights from a call with Foxconn management, highlighting that AI server production is increasing. Additionally, a fundamental peak in the semiconductor cycle is anticipated as year-over-year sales and pricing growth approaches its zenith. According to Morgan Stanley, hardware revenue growth is projected to peak in the first quarter of 2025, suggesting that the current upcycle may last up to six more quarters. Despite this optimism, Texas Instruments' CEO noted that the global semiconductor shipments have fallen below 2019 levels, indicating a weak market environment. A chart from Texas Instruments illustrated the severity of the current down cycle in semiconductor shipments, emphasizing the critical role of semiconductors in the economy and the contrasting strength of pricing that has sustained revenues.
This chart from $TXN showing semiconductor units shipped really puts it in perspective on how bad the down cycle has been. Semis are the lifeblood of the economy & this just represents how weak growth is. What it doesn’t show is how strong pricing has been which has kept revenues… https://t.co/UJR1oAmNvG
$TXN CEO: "You can see here that the current market environment remains weak with global semiconductor shipments now below 2019 levels. We believe it is helpful to consider the last 3 peaks as we prepare for the opportunity ahead" https://t.co/oVoCZIiCh0
"Based on current consensus forecasts, hardware revenue growth is expected to peak in 1Q25, supporting the notion that we are only ⅓ of the way through the upcycle and that this upcycle could last closer to 6 quarters." - Morgan Stanley https://t.co/lPjuRnw63o
