Nvidia, AMD, Qualcomm and ON Semiconductor: A Trillion-dollar Company To Be


NVIDIA, AMD, Qualcomm, and ON Semiconductor are semiconductor companies that reported impressive quarterly earnings.

This year alone, the companies’ earnings are concluded below based on the trading session and first-quarter results.

  • NVIDIA (NASDAQ: NVDA) stock gained 0.35%, and sales grew 84% with revenue: of $5.66 billion versus $5.41 billion estimated.
  • AMD (NASDAQ: AMD) reported a 71% sales growth with revenue: of $5.89 billion versus $5.52 billion expected, sending the stock up as much as 8% in extended trading.
  • ON Semiconductor (NASDAQ: ON) sales of $1.95 billion also outpaced analysts’ consensus estimate of $1.9 billion.
  • Qualcomm (NASDAQ: QCOM) stock is driving up over 4% with revenue: of $11.16 billion, better than expected of $10.60 billion.

The Semiconductor Industry Association (SIA) has released figures showing that worldwide sales of semiconductors totaled $151.7 billion during the first quarter of 2022. This represents an increase of 23% over the first quarter of 2021 but is down 0.5% in the fourth quarter of 2021.

In addition to the year-to-year sales increase in the Americas, sales were up compared to March 2021 in Europe (25.7%), Japan (20.4%), Asia Pacific/All Other (17.9%), and China (17.3%). Month-to-month sales increased in Asia Pacific/All Other (2.9%), Europe (2.6%), Japan (1.4%), and China (1.0%), but fell slightly in the Americas (-1.5%).

With the number, it indicates strength in the broader semiconductor market, with global sales expected to grow at a rate of 6 to 8% per year until 2030. Thus, it would make semiconductors a trillion-dollar industry by the turn of the decade.

However, the real question is why global semiconductor sales remained strong during the first quarter of 2022.

What Exactly Happened?

According to a McKinsey & Company report, only three industries are expected to drive 70 percent of growth: automotive, computation and data storage, and wireless.

Over the last year, the semiconductor industry, which produces critical components for the technologies we all rely on, has made headlines.

Supply shortages prompted delays in the production of everything from cars to computers, demonstrating how critical small chips are to the world’s economy’s efficient operation.

In many ways, semiconductors are “built” into our world. With chip demand expected to expand over the next decade, semiconductor manufacturing and design firms would benefit from a thorough examination of where the market is headed and what will drive long-term demand.

According to a McKinsey & Company report, only three industries are expected to drive 70 percent of growth: automotive, computation and data storage, and wireless.

Automotive is projected to be the fastest-growing segment, with demand potentially tripling because to applications like autonomous driving and e-mobility.

In 2030, the cost of semiconductor content in a Society of Automotive Engineers (SAE) Level 4 automobile with an electric drivetrain might be around $4,000, compared to $500 for an SAE Level 1 car driven by an internal-combustion engine.

Despite only accounting for 8% of semiconductor demand in 2021, the automotive industry is expected to contribute for 13 to 15% by the end of the decade. According to this, the segment might account for up to 20% of the industry’s growth in the next years.

According to the report, demand for servers to enable applications such as AI and cloud computing could drive growth of 4 to 6% in the compute and data-storage market.

Meanwhile, smartphones may account for the majority of the increase in the wireless category, thanks to a move from lower-tier to mid-tier segments in emerging nations and 5G development.

What are the implications for decision-makers? Despite probable short-term volatility owing to supply-demand mismatches, as well as a changing global economic and geopolitical outlook, the semiconductor industry’s future seems bright.

What else are you looking for in the semiconductor industry’s stocks?

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