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Which are the biggest semiconductor companies in US by market cap?
|Ticker||Company||Stock Price||Market Cap in $||Market Cap Performance YoY%|
|NVDA||NVIDIA Corporation||460.2||1.137 T||181%|
|TSMC||Taiwan Semiconductor Manufacturing Co. Ltd.||17.2||447 B||4%|
|AVGO||Broadcom Inc.||851.8||352 B||59%|
|AMD||Advanced Micro Devices, Inc.||102.3||165 B||12%|
|TXN||Texas Instruments Incorporated||167.8||152 B||-2%|
|INTC||Intel Corporation||33.3||139 B||2%|
|QCOM||QUALCOMM Incorporated||110.3||123 B||-21%|
|ADI||Analog Devices, Inc.||178.2||90 B||10%|
|MU||Micron Technology, Inc.||63.7||70 B||10%|
|NXPI||NXP Semiconductors N.V.||196.2||51 B||6%|
*Top 10 biggest semiconductor manufacturing companies by their market cap as on Aug 26, 2023.
NVIDIA is the clear leader with over 181% growth in market cap compared to last year at the same time.
NVIDIA’s success on the stock market is majorly because of the huge orders coming from OpenAI, the parent company of ChatGPT.
OpenAI used 10,000 of NVIDIA’s GPU to train its AI. After its launch, ChatGPT quickly gained over 100 million users and they are still increasing. With the increased users, ChatGPT will need over 30,000 GPUs from NVIDIA which will further increase NVIDIA’s revenue in the coming quarters.
Why are semiconductor so important?
Semiconductors are a foundation of the modern lifestyle.
All our smart gadgets including our phones, TV, smart watches, microwaves and even the cars we drive and the AI software like ChatGPT are all dependent on semiconductor for their fast processing power.
As a society the more we move towards automation in our day to day life, the more we become dependent on the semiconductor industry.
In fact in 2020 and 2021 we saw how the semiconductor shortage affected the Automobile industry across the world. Semiconductor companies across the world were simply not able to keep up their production with the demand coming from automobile industry.
The increase in waiting time and a surge in prices of used cars can partially be attributed to the semiconductor shortage during those times.
Which semiconductor company is the most critical?
While NVIDIA is the most popular name right now among the chip manufacturers but its considered a No-fab company. A No-fab company within the semiconductor is a company which doesn’t do the fabrication of the semiconductor chips on their own but outsources it to foundries like TSMC.
TSMC based in Taiwan is one of the largest and most advanced semiconductor chip foundry globally. It is a key player in producing chips for companies like NVIDIA, Apple, AMD and Qualcomm.
TSMC provides the manufacturing foundation for companies like NVIDIA to make their chip designs a reality. Truth is without advanced production capabilities of foundries like TSMC, semiconductor designers won’t be able to create the intricate and powerful chips that companies like NVIDIA and AMD produce.
Which semiconductor stock to buy?
Although the whole semiconductor industry is currently led by NVIDIA in terms of stock market performance but it has already gained over 300% in 2023. It might be a bit late for new investors to jump onto NVIDIA stock, though there is plenty of room to grow for NVIDIA. Specially with NVIDIA’s earning forecast for next 3 quarters which is quite promising.
AMD is also been catching up very quickly on the AI market. MosaicML, an upcoming competitor to ChatGPT has confirmed that AMD’s chips performed nearly as good as NVIDIA’s for the training of its AI in a recent test conducted by them.
Also, Microsoft which now has a major stake in OpenAI doesn’t want to depend on a single vendor for the processing power requirements coming from OpenAI and its own data centers.
Microsoft has been reported to provide financial and engineering support to AMD to develop their AI chips project – code name Athena.
To summarize, apart from the leader NVIDIA, TSMC and AMD are definitely the companies to watch out because of their strategic positioning in the semiconductor market.
Check out our article on TSMC, The world’s No. 1 chipmaker: here.