Source: Zhitong Finance "Since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%)." With the rebound of the stock market, the old adage "Sell in May and Go Away" seems to have been a bad advice once again. Last month, the S&P 500 index rose 4.8%, the best May performance since 2009. The NASDAQ 100 index rose nearly 6.2%, and the NASDAQ Composite Index rose 6.9%. Goldman Sachs FICC & Equities Trading Division said: "History doesn't really support this saying. Don't sell, leave the market (go on vacation), and enjoy the good times." The rising trend is still to be continued? If history is any guide, it may indicate that the rise of the stock market is not over yet. Looking ahead to the rest of 2024, Scott Rubner, Managing Director of the Goldman Sachs Global Markets Division and tactical expert, pointed out the following historical background for investors. Rubner stated that the S&P 500 index has risen 10.7% year-to-date, and since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%). "Since 1950, the median return of the last 7 months of each year (June 1 to December 31) is 5.4%. In the aforementioned 21 cases, the average performance of the last 7 months increased to 8.1%." Rubner added. Rubner also pointed out that the NASDAQ index has risen for 16 consecutive Julys, with an average return of about 4.64%.

According to reports citing insider sources, Chinese tech giant ByteDance is collaborating with one of the biggest winners in the global AI trend to develop an advanced customized AI chip known as an "ASIC chip" focusing on AI acceleration. With Broadcom's absolute technical leadership in high-speed data transmission technology and chip-to-chip interconnect communication field, this move may help the owner of TikTok to ensure a sufficient supply of high-end AI chips under the heavy pressure of US chip sanctions. Insiders added that the 5nm advanced process chip is an AI field ASIC customized chip that will comply with US chip export restrictions, and that chip manufacturing will be outsourced to Broadcom's most important chip foundry, known as the "king of chip foundries." $Broadcom (AVGO.US)$Insiders revealed that the 5nm AI chip produced by TSMC is almost running at full capacity, and it is not expected to start producing new AI chips this year, marking an important step in the design phase's impending end and the beginning of mass production phase for chips, known as "tapeout." "tapeout" usually refers to the end of the circuit architecture design phase, which tests small-scale manufacturing for trial purposes. If all tests go well, TSMC and other foundries can start mass production.

Insiders added that the 5nm advanced process chip is an AI field ASIC customized chip that will comply with US chip export restrictions, and that chip manufacturing will be outsourced to Broadcom's most important chip foundry, known as the "king of chip foundries." $Taiwan Semiconductor (TSM.US)$The chip manufacturing will be carried out by chip foundry.

Regarding this news, ByteDance has recently stated that the news is not true. Broadcom rose about 2% in pre-market trading, but as of publication, the stock has turned down.

It is understood that Broadcom has already provided AI processors of the previous generation at the 7nm level for ByteDance's data center. The two companies' existing business relationships mainly revolve around servers and network equipment.

TSMC is still the core chip manufacturer for many global Fabless chip design companies, including Apple, Broadcom and many others. It has earned the title of the top chip foundry manufacturer. It is particularly known for its data center server-side and AI chips manufactured for companies such as Nvidia and AMD, which are the key hardware infrastructure behind large-scale AI training/inference systems driving ChatGPT and Sora, and beyond.$NVIDIA (NVDA.US)$, $Advanced Micro Devices (AMD.US)$Like many global tech giants, ByteDance plays a key role in driving the global generative AI field, but it and many Asian tech peers have faced heavy pressure from US government-led sanctions on high-end semiconductor products. Under the US sanctions, high-performance AI GPU developed by chip giants such as Nvidia and AMD cannot enter these regions.

Since the US export controls on advanced semiconductor products such as semiconductor equipment and raw materials and AI chips in 2022, there have been almost no publicly announced chip development collaborations involving 5nm and more advanced chip manufacturing technologies between Chinese and American companies. Insiders emphasized that ByteDance's collaboration with existing chip business partner Broadcom will help reduce procurement costs and ensure a stable supply system for high-end AI chips.

However, according to reports citing insider sources, TSMC, which operates at almost full capacity for 3nm and 5nm AI chips, is not expected to begin producing these new AI chips this year. Insiders said that although the design work of the latest AI chips is going smoothly, the "tape-out" phase, which marks the end of the design phase and the beginning of the mass production phase, has not yet begun.

"Tape-out" usually refers to the end of the circuit architecture design phase, which tests small-scale manufacturing for trial purposes. If all tests go well, TSMC and other foundries can start mass production.

ByteDance is stepping up its layout of generative AI, playing a key role in driving the global generative AI field, but the company and many Asian tech peers have to face heavy pressure from US government-led sanctions on high-end semiconductor products. Under the US sanctions, high-performance AI GPU developed by chip giants such as Nvidia and AMD cannot enter these regions.

with$Microsoft (MSFT.US)$, $Alphabet-A (GOOGL.US)$/$Alphabet-C (GOOG.US)$and $Amazon (AMZN.US)$At the FORCE dynamo conference held in the spring of 2024, ByteDance released the "Dou Bao Large Model" officially. At the same time, ByteDance also announced the market pricing of the large model, with the main model of Dou Bao costing 0.0008 yuan / per thousand Tokens, which can process more than 1,500 Chinese characters for only 0.8 cents, 99.3% cheaper than the industry standard.

It is understood that ByteDance and Broadcom have been important business partners at least since 2022. Broadcom has stated in public statements that this Chinese tech giant has purchased the Tomahawk series of 5nm high-performance switch chips from Broadcom and the Bailly exchange chips used for AI supercomputer clusters.

Ensuring a sufficient scale of AI chip supply is crucial for ByteDance to make its algorithm capabilities more powerful. In addition to TikTok and domestic short-video application platform Douyin, ByteDance also operates a series of popular applications, including an AI chatbot service similar to ChatGPT called "Dou Bao" with up to 26 million users.

Dou Bao is a AI assistant application launched by ByteDance in June 2023. At present, among various iOS and Android app stores, Dou Bao ranks first in its downloads for AI general conversation applications and has over 26 million monthly active users and a total creation of 8 million smart entities.

This 2025, revenue of the company was 1.8 million liters, up 28.10% YoY, with significant growth. By product structure, operating income of 100-300 billion yuan products are RMB 401/1288/60 million respectively.

Insiders also revealed that ByteDance has reserve sufficient scale of Nvidia chips to support its AI business. Insiders said that this includes Nvidia's A100 and H100 AI GPUs, which were already on the market before the first round of high-end semiconductor sanctions in the United States, as well as the A800 and H800 chips that Nvidia custom-made for the Chinese market, but were also restricted later.

Insiders also said that ByteDance allocated approximately USD 2 billion last year to purchase Nvidia chips. According to sources, ByteDance also purchased Huawei's Ascend 910B chip last year.

Some information on ByteDance's website shows that the company currently has hundreds of semiconductor-related job vacancies, including 15 ASIC chip designer positions.

Broadcom - now, and in the future, one of the biggest beneficiaries of the AI boom.

Broadcom, one of the biggest winners in the global AI boom, previously announced its fiscal year 2024 second-quarter earnings report as of May 5th, for Beijing time. Broadcom is an important chip supplier for large technology companies and a key supplier of Ethernet switch chips and ASIC customized chips for large global AI data centers.$Apple (AAPL.US)$Under the tremendous demand for chip and software products related to AI business, the latest financial data and annual forecast data of the company far exceeded the expectations of Wall Street analysts, and the stock price soared to historic highs. Broadcom's latest financial data show that non-GAAP earnings per share in the second fiscal quarter reached as high as USD 10.96, compared to an average analyst expectation of USD 10.80 and USD 10.32 for the same period last year, excluding some special items. Meanwhile, the scale of total revenue in the second fiscal quarter of Broadcom increased significantly to USD 12.5 billion, higher than the average analyst expectation of USD 12.1 billion, and a sharp increase of 43% from the same period last year.

Broadcom CEO Hock Tann predicts that total revenue related to AI in fiscal year 2024 will exceed USD 11 billion. The revenue of non-AI chip business, which has been low for several years, also rebounded in the second fiscal quarter. He said in a conference call with analysts that there may be a moderate recovery trend in the second half of fiscal year 2024.

Broadcom is a leader in RF chips for smartphones and wired and wireless communication fields. In terms of AI underlying hardware, there is an extremely strong demand for Broadcom's Ethernet switch chips and AI ASIC chips based on Broadcom's data interconnect technology. Rumor has it that big technology companies such as Google and Microsoft often request to purchase hardware products related to Broadcom's Ethernet technology. In addition to chip design, Broadcom also provided key intellectual property for chip-to-chip interconnect communication for Google and was responsible for manufacturing, testing, and packaging new chips, while expanding new AI data centers for Google via its own strong chip supply chain network.

More importantly, in recent years, Broadcom has become the most important participant in AI ASIC customized chips with its absolute technical leadership in data high-speed interconnect technology and chip-to-chip interconnect communication field. For example, TPU AI acceleration chips, a high-performance AI chip for data center servers self-developed by Google, Broadcom is the most core participation force. Broadcom and Google team jointly participated in the development of TPU AI acceleration chip. In addition to chip design, Broadcom also provided key intellectual property for chip-to-chip interconnect communication for Google and was responsible for manufacturing, testing, and packaging new chips, while expanding new AI data centers for Google via its own strong chip supply chain network.

The strong demand for Ethernet switch chips and ASIC customized chips closely related to AI can be obviously seen in Broadcom's strong revenue data since fiscal year 2023 and fiscal year 2024 to date. Especially, AI ASIC customized chips have become Broadcom's increasingly important source of revenue. Media reported that American technology giant Microsoft and Meta, the parent company of Facebook, will choose Broadcom as their core partner for self-developed chip technology. Meta previously cooperated with Broadcom to design its first and second generations of AI training acceleration processors. Analysts generally expect that Broadcom will accelerate the development of Meta's next-generation AI chip, MTIA 3, in the second half of 2024 and 2025.

Under the tremendous demand for Ethernet switch chips and ASIC customized chips closely related to AI, Broadcom's latest financial data far exceeded the expectations of Wall Street analysts, and the stock price soared to historic highs. In addition to developing AI ASIC customized chips, Broadcom's data interconnect technology and strong chip supply chain network are also significant advantages. With the joint participation of chip design, manufacture, testing, and packaging, Broadcom will escort the expansion of new AI data centers for big technology companies such as Google and Microsoft with its strong technical and supply chain strength.

According to research reports by the well-known research institution IDC, the total AI investment in software, hardware, and related services covering AI-centric systems worldwide is only about USD 132.49 billion in 2022, but it is expected to grow to USD 512.42 billion in 2027 with an annual compound growth rate (CAGR) of up to 31.1%, and will fully focus on generative AI fields like ChatGPT.

The latest IDC survey shows that by 2027, 45% of companies will use generative AI tools to collaboratively develop digital products and services, striving to double their revenue growth compared to their competitors. IDC also predicts that the global generative AI market will have an annual compound growth rate of 85.7%, and the market size of the global generative AI market will be close to USD 150 billion by 2027. All of these mean that Broadcom, which is one of the leaders in the core infrastructure of AI, Ethernet switch chips, and another infrastructure, the AI field-customized ASIC chips, is expected to continue to benefit from this unprecedented AI boom in the coming years.

Editor/tolk