Deutsche BankResearchSemiconductors: What to expect in 2024 in 8 slidesMarion Laboure, Ph.D - Thematic Researchmarion.laboure@db.comCassidy Ainsworth-Grace - Thematic Researchcassidy.ainsworth-grace@db.comIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. MCI (P) 041/10/2023. UNTIL 19th MARCH2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.1Ross Seymore - Equity Researchross.seymore@db.comMelissa Weathers - Equity Researchmelissa.weathers@db.comJohannes Schaller - Equity Researchjohannes.schaller@db.com#PositiveImpactDistributed on: 13/02/2024 11:02:05 GMT7T2se3r0Ot6kwoPaSemiconductors | February 2024Deutsche Bank Research | 2Since we published our last update in October (link), the US-China high-tech tensions have intensified. Most notably, China is advancing its chipmaking capabilities despite tightening US restrictions.Yesterday, Nvidia briefly surpassed Amazon to be the 4th largest fully listed company in the world. Last week, it was reported that SMIC, China’s top foundry, is aiming to leverage its existing stock of US and Dutch-made equipment to produce 5nm chips this year. This follows its successful production of 7nm chips in August. Nvidia also announced a new $30bn business unit to design custom AI and cloud computing chips, including for OpenAI.In 2023, the semiconductor space split dramatically. AI leaders like Nvidia saw unprecedented gains of nearly +240% in 2023. Conversely, broad-based, lagging edge, and cyclical names struggled to keep pace.In 2024, three pivotal trends will likely define the landscape:1. Sustaining Artificial Intelligence demand - Will rapid AI growth persist or plateau?2. Economic cycles shape demand - Which end markets like consumer electronics are most critical? 3. Geopolitics upend supply chains - How are ongoing tech and trade battles reshaping global alliances? In this chartbook, we analyse these top 3 themes that will likely shape the semiconductor industry in 2024; and then provide an in-depth analysis of the equity outlook for the sector.CHARTBOOK: Semiconductors: What to expect in 2024 in 8 slidesSource: Deutsche Bank, Bloomberg Finance LP, CNBC, Financial Times.Timeline of recent events in the semiconductor market2022Oct 7 2022: US releases new rules prohibiting US companies exporting technology, software and equipment used in advanced chips.Mar 31: China launches cybersecurity review of imports from US memory-chip maker, Micron.May 22: China bans some sales of chips from Micron.Jul 3: China announces new restrictions on gallium and germanium exports. 4 Sep: Bloomberg reports on 7nm SMIC chip in new Huawei smartphone.17 Oct: US tightens restrictions on the sale of chips that Nvidia designed for the Chinese market. 20 Oct: China imposes export restrictions on cretain types of natural graphite. Oct: Canon announces a new, cheaper, lithography chipm...
