Source: Zhitong Finance

Recently, affected by positive industry news, semiconductor stocks were active during the Monday session EST, including$Arm Holdings (ARM.US)$,$Micron Technology (MU.US)$und$Taiwan Semiconductor (TSM.US)$etc. According to information, companies such as ARM and Micron received target price increases from investment bank KeyBanc Capital Markets, while TSMC received funding from the US government to build chip factories.

Arm's stock price rose 3.6% in Monday's session to close at $129.25, while Micron's stock rose 5% during the intraday period, although it fell 0.5% at the end of the day to $122.95. TSMC closed up more than 1% to $142.7.

KeyBanc raised semiconductor stock target

According to information, KeyBanc Capital Markets recently conducted in-depth research on the semiconductor industry, paying special attention to$NVIDIA (NVDA.US)$, Micron Technology, Arm, etc. The bank's analysts John Vinh and Jim Long pointed out in a report to clients that their quarterly supply chain survey results in the industry presented a complicated situation.

Among them, in the field of analog electronics, they saw that the Chinese market is recovering, although the rest of the world is still sluggish. Furthermore, although global demand for personal computers (PCs) is currently basically flat, demand for iPhones in China is weakening, while in India it is even stronger; the high-end Android phone market remains steady, but the low- to mid-range market performance is poor. At the same time, the AI market continues to grow strongly, despite facing many challenges.

First, KeyBanc raised Nvidia's target price to 1,200 US dollars, believing that GB200 itself could generate 90 billion to 140 billion US dollars in revenue. Furthermore, Nvidia plans to double its CoWoS capacity at TSMC next year, while demand for the H20 in China “far exceeded expectations” and could generate between $9 billion and $12 billion in incremental revenue this year. However, on Monday, Nvidia's shares fell 1% to $871.33.

Second, KeyBanc analyst Vinh raised the target prices for ARM and Micron due to improved market prospects. He said that Arm's influence and popularity in the semiconductor ecosystem continues to increase, and pointed out that the chip design company is gaining more and more market share in the data center market and personal computers.

Vinh also emphasized that Nvidia's Grace CPU Superchips are expected to significantly boost the adoption of ARM central processors in data centers. Meanwhile, computer makers like Lenovo are optimistic about the future of Arm-based personal computers.

Micron's HBM3e high-bandwidth memory products are superior to competitor SK Hynix products, and it is expected that Micron's HBM products will benefit from the launch of Nvidia's latest data center AI processor. The bank's analysts raised Micron's target price to $150. Vinh anticipates that as investors become more aware of Micron's strong position in HBM, the company's stock price is expected to be re-rated and seen as a significant player in the field of artificial intelligence.

Among the other semiconductor stocks covered by Vinh, he is right$Monolithic Power Systems (MPWR.US)$und$Qualcomm (QCOM.US)$Have a more positive attitude. However, he specifically pointed out that since the 5G penetration rate in smartphones has reached 60%, Skyworks' ability to grow content in the smartphone field is facing more and more challenges, so KeyBanc will$Skyworks Solutions (SWKS.US)$The rating was downgraded from “gain weight” to “neutral.”

TSMC received US$11.6 billion in financial support from the US Department of Commerce

The US government plans to provide TSMC, the “King of Global Foundry”, with direct grants of up to US$6.6 billion and loans of up to US$5 billion to support the world's largest chipmaker to establish 5nm and below advanced chip factories in Arizona to help the world's top chip makers build more chip factories in the US and expand production capacity. The ultimate goal is to make the US a chip manufacturing powerhouse and accelerate the “return of chip manufacturing to the US” expected by the Biden administration. Previously, US chip manufacturing giants$Intel (INTC.US)$It has received up to $8.5 billion in government subsidies and up to $11 billion in special loan support.

According to a preliminary agreement announced by the US government on Monday, TSMC will build a third large-scale chip factory in Phoenix, Arizona's largest city. The first and second large-scale chip plants previously announced in the state are expected to be put into large-scale operation in 2025 and 2028, respectively. TSMC is an American tech giant$Apple (AAPL.US)$, Nvidia, and$Advanced Micro Devices (AMD.US)$In total, the US government's subsidy program will support TSMC's investment in these three US chip factories of more than 65 billion US dollars, as the core chip foundry of the other chip design giants.

According to information, TSMC's third chip manufacturing site in the US will use next-generation 2nm process technology and is scheduled to be put into operation by 2030. US Secretary of Commerce Gina Raymond said that 2nm chips are critical to emerging technologies, including artificial intelligence, as well as military technology. TSMC's first and second chip factories in Arizona, USA, focus on 5nm and below advanced process chips, and are expected to focus on 3nm advanced manufacturing processes.

Institutions are also optimistic about this. TSMC is in a leading position in high-efficiency computing (HPC) and artificial intelligence (AI) chips, and has close partnerships with relevant market leaders, and continues to lead competitors such as Intel. The agency estimates that although TSMC continued to face the impact of the off-season in the second quarter, revenue for the second quarter will continue to grow, benefiting from the recovery in smartphone demand and the demand for AI chips. It is estimated that revenue will continue to grow by 5% in the quarter, and gross margin will decline slightly due to the 3nm release.

Editor/jayden