JPMorgan Chase analysts have an optimistic outlook on the semiconductor industry heading into 2025, with year-on-year sales growth projected between 10% and 12%.
This is expected to outpace the automotive and other industrial sectors thanks to ongoing demand for high-end artificial intelligence chips.
For clarity, JPM’s analysts refer specifically to the manufacturing side of the semiconductor market, thus excluding chip designers like Nvidia Corp and Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD).
JPM expects capital expenditure in semiconductor manufacturing to rise by over 5% in the year ahead.
This increase is attributed to advancements in production technologies, such as gate-all-around (GAA) architectures and high-bandwidth memory (HBM).
Chip design software and electronic design automation (EDA) tools are also forecasted to grow between 10% and 15%.
Broadcom Inc (NASDAQ:AVGO, ETR:1YD), Marvell Inc and Synopsys Inc (NASDAQ:SNPS, ETR:SYP) are JPM’s top picks for the sector.
These companies are poised to benefit from their strong positions in AI computing, chip design software, and advanced manufacturing processes, said the bank.